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US Chamber China Trade & Investment News
March 05, 2008
Trade
March 05: Yuan value drops following easing of dollar depreciation, US
manufacturing increase.
China Trade Extra
March 05: China says it will follow WTO rules in new financial news dispute with
US, EU.
China Trade Extra
March 05: China's trade surplus will grow at a slower pace in 2008 due to weaker
U.S. demand in the wake of the subprime mortgage crisis, a top Commerce
Ministry official said. "The impact from the U.S. credit crisis is becoming bigger
and bigger, so this will definitely affect exports this year because demand from
U.S. markets will become less," Vice Minister Ma Xiuhong said. China's trade
surplus for all of 2007 jumped to a record of more than $262 billion, about 48
percent higher than in 2006.
The Guardian
March 05: China's commerce ministry reacted in unusually mild fashion to a World
Trade Organization action brought by the European Union and US over Beijing's
regulation of financial news and information. Washington and Brussels this week
began WTO proceedings over 2006 rules that effectively put the Chinese financial
information businesses of international news providers under the control of local
rival and regulator.
Financial Times
March 05: A recent American Chamber of Commerce Shanghai report suggests
that there has been a paradigm shift regarding China as a low-cost country for
manufacturing. The study indicates that because of the rising costs, large
multinationals no longer perceive China as the leading low-cost export platform.
Companies are experiencing annual increases of seven to 10 percent in their
costs of white-collar management, support staff, blue collar workers and raw
materials.
China Briefing
Congressional Issues
March 05: Senate begins consideration of CPSC reform bill.
China Trade Extra
March 05: Chamber opposes ban on chemical in CPSC reform bill.
China Trade Extra
National People's Congress
March 05: Top Chinese leaders including top legislator Wu Bangguo and Premier
Wen Jiabao joined panel discussions with the country's political advisors who are
meeting for their annual full session in Beijing. The discussions of political
advisors, or members of the 11th National Committee of the Chinese People's
Political Consultative Conference, were joined by CPPCC National Committee
Chairman Jia Qinglin, and other senior Communist Party of China leaders Li
Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang.
People's Daily Online
March 05: China will establish a stock market for growth enterprises this year,
said Premier Wen Jiabao while delivering a government work report. "We will
establish a market for growth enterprises, accelerate development of the bond
market and steadily develop the futures market," Wen said at the opening of the
First Session of the 11th National People's Congress, the national legislature.
National People Congress
March 05: China plans to allocate 6.8-billion-yuan ($951 million) in its 2008
budget to build low-rent houses for urban poor, Premier Wen Jiabao said. The
amount is 1.7 billion yuan ($238 million), or 33 percent, more than last year, Wen
said in his report to the First Session of the 11th National People's Congress that
opened at the Great Hall of the People in central Beijing. The government will also
build more affordable houses and tighten the management on them to ease
housing difficulties of low-income urban residents, the Premier said.
People's Daily Online
March 05: China will explore to integrate functions of small departments to found
larger ones in the State Council reform, said Premier Wen Jiabao. The plan is to
avoid "overlapping responsibilities" and "powers not being matched by
responsibilities," Wen said in his government work report to the First Session of
the 11th National People's Congress.
National People's Congress
March 04: Many new faces are showing up in the military delegation to attend
China's new parliamentary session, scheduled to kick off in Beijing. Among the
268 to represent the country's 2.3-million armed force, 230 are new comers to the
National People's Congress, the country's top legislature, while the others have
already served a five-year tenure on the 10th NPC. The number of female
deputies stands at 22, accounting for 8.2 percent of the total, while 6 percent of
the total are ethnic minorities. New deputies are also more educated than before
as 80.6 percent of them are college graduates, 16.4 percent more than five years
ago, the source said.
People's Daily Online
Economy
March 05: Chinese Premier Wen Jiabao said his nation faces rising economic
risks from both inflation and a global economic slowdown, sounding a cautious
note as he begins his second term. "The current price hikes and increasing
inflationary pressure are the biggest concern of the people," Mr. Wen said. Mr.
Wen said his government will endeavor to keep consumer-price inflation at 4.8%
this year, the same rate as in 2007, while acknowledging that inflationary
pressures remain "great."
The Wall Street Journal; The Wall Street Journal; Washington Post; Washington
Post; Washington Post
March 05: Tackling record levels of inflation is one of China's major tasks for this
year, Premier Wen Jiabao has said. Inflation rose by 7.1% in January - the highest
level in more than a decade and opinion polls show it is one of Chinese people's
top concerns. Speaking at the opening of China's annual parliamentary session,
he said economic growth would slow to about 8%. Chinese politicians are worried
higher food prices could lead to discontent and social unrest, correspondents say.
BBC News
March 05: China will not have inflationary spiral this year with a 9 to 10 percent
gross domestic product growth, predicted Justin Yifu Lin in Beijing. "China's
economy growth will maintain a high level this year and the inflationary spiral is not
in sight," said Lin, newly-appointed senior vice president of the World Bank.
"Chinese government is very flexible in exercising policies. The current tight
monetary policy is just a good example," he said.
People's Daily Online
Healthcare
March 05: Improving the ethics of the country's medical professionals is a key
task for the nation's universities, China's top health official said. In recent years
excessive prescriptions are partly responsible for a spike in medical disputes,
many of which escalated into violent confrontations which made national
headlines. The minister said meeting the public's medical care expectations was
another major challenge facing the healthcare industry.
People's Daily Online
March 05: China has drawn up a preliminary plan on the health care reform which
will soon be publicized to solicit opinions from the general public, Premier Wen
Jiabao said. The reform aims to maintain the public service nature of public
medical and health care services and set up a basic medical and health care
system to provide safe, effective, convenient and affordable service, said Wen
while delivering a government work report speech.
Xinhua
Foreign Investments
March 05: Tarsus, the international business-to-business media group said it has
acquired a 50% stake in a Chinese exhibition operator with a cost of up to £1.4
million in an effort to tap into China market. The stake was bought from Hubei
Hope Exhibition which runs exhibitions in central and western China. Tarsus eyes
the nation a key part of its development strategy as great potential exists in the
fast-growing emerging market, said managing director Doug Emslie, adding that
the company's pre-tax profits expanded to £11.9 million from £7 million.
China Knowledge
March 05: OCO Global, the leading authority on foreign investment, released its
global foreign direct investment data for 2007 and revealed that China retained its
position as the world’s top destination for multinational investment, followed by
India and the US. According to the data, China attracted US$90 billion in 1,171
projects last year, while India and the U.S. attracted US$52.5 billion and US$46.8
billion respectively.
China Knowledge
Food/Consumer Product Safety Issues
March 05: Chinese premier said that Beijing is taking steps to ensure that its
product safety regulations meet international standards, signaling another phase
in China's wide-ranging campaign to repair its battered reputation as an exporter.
China's exports have come under heavy scrutiny in the past year after potentially
deadly levels of chemicals were found in goods ranging from toothpaste to toys to
a pet food ingredient.
Washington Post
Energy & Environment
March 05: China reported reductions in energy consumption as well as chemical
oxygen demand and total sulfur dioxide emission last year, Premier Wen Jiabao
said at the annual session of the National People's Congress. For the first time in
recent years, China reported a reduction in both chemical oxygen demand and the
total emission of sulfur dioxide, by 3.14 percent and 4.66 percent respectively from
the previous year, he said. In 2007, China saw a 3.27 percent year-on-year drop in
energy consumption for each unit of GDP, Wen said in his report to the First
Session of the 11th National People's Congress.
National People's Congress
March 05: China's premier promised to reduce emissions, conserve energy and
shut down outmoded and inefficient factories in heavily polluting industries such as
electricity, coal and steel. "We must increase our sense of urgency and intensify
efforts to make greater progress," Premier Wen Jiabao said. China has been
battling major environmental problems as its double-digit economic growth boosts
manufacturing and energy industries that emit vast amounts of carbon and soot
into the air. The country has 16 of the world's 20 most polluted cities.
USA Today
March 05: PetroChina, China's largest oil producer, is discussing with Qatar
Petroleum to jointly establish a petrochemical facility in China, a PetroChina
source revealed. A feasibility study on the joint-venture project is well underway,
said the source, adding that how much the company will invest in the project and
where it will be located were yet to be decided, according to China Securities
Journal.
Xinhua
March 04: China's natural gas output would at least double the present volume in
the coming decade to reach 150 billion to 200 billion cubic meters, PetroChina
Vice President Jia Chengzao said. Recent discoveries of new gas fields, including
Jidong Nanpu Oil Field in north China's Bohai Bay, which contains 1.18 billion tons
of oil and gas reserves, would boost China's natural gas sector and optimize its
energy structure, said Jia. China's natural gas output reached 69.31 billion cubic
meters last year, up 23.1 percent year-on-year, according to China Petroleum and
Chemical Industry Association.
People's Daily Online
March 04: China Guangdong Nuclear Power Group and the Hubei provincial
government signed an agreement here to build the country's first inland nuclear
power plant. China currently has 11 nuclear generators in six nuclear power
plants, all located along the eastern coast, with a combined installed capacity of
9.07 million kilowatts. The CGNPG's installed capacity is 3.95 million kw, or 43.5
percent of the total.
People's Daily Online
Insurance & Finance
March 05: The chairman of China International Trust & Investment Corp., or Citic
Group, said the company wants more for its money in a deal with Bear Stearns
Cos. because the U.S. investment bank's share price has fallen. "There are still
risks in the U.S. financial system that haven't been completely resolved," said
Kong Dan. "Both sides really want to cooperate, but we need to adjust the price
according to the market." Citic Securities Co., a unit of Citic Group and China's
largest brokerage by market value, agreed last October to a deal in which it and
Bear Stearns would each invest in one another.
The Wall Street Journal; Washington Post
March 05: Goldman Sachs Group Inc. named Cai Jinyong, an eight-year veteran
of the firm, as chief executive of its Chinese securities joint venture and head of
Goldman's China investment-banking business. The promotion of Mr. Cai, who
made partner in 2006, should bring some stability to the top ranks of Goldman's
China operations after the departure of Richard Ong, its most senior Beijing-based
banker, this month.
The Wall Street Journal
March 05: China’s stock markets have mimicked the pattern of many others
around the world over the past six months, peaking in October while seeing
accelerating losses this year. The Shanghai composite is down 18 per cent this
year and nearly a third from last year’s high. The size of recent issues could signal
that companies are feeling confident there is still strong demand from investors in
China.
Financial Times
March 05: Bank of China, the Chinese lender with the largest portfolio of
subprime-related investments, has disposed of almost all its collateralized debt
obligations, Chairman Xiao Gang said at the ongoing National People's Congress.
The Beijing-based lender said earlier it owned US$7.95 billion of subprime
securities, of which US$496 million were in the form of CDOs.
China Knowledge
March 05: China will continue deepening reform of the banking industry this year,
with focuses on the introduction of a shareholding system in the Agricultural Bank
of China and the reform of the China Development Bank, Premier Wen Jiabao
said. In 2007, ABC's deposit business increased 549.7 billion Yuan, while its loan
business increased 330.4 billion Yuan. It also cleared 57.4 billion Yuan in bad
loans.
People's Daily Online
March 05: Gome Electrical Appliance Holdings Ltd, China's biggest home
appliance retailer, has become the biggest shareholder of Shandong Provincebased appliance retailer, Sanlian Commerce Co Ltd, by paying RMB 541 million to
the former holder, according to Sanlian's filing with the Shanghai Stock Exchange.
Gome, which acquired the 10.7% stake from Shandong Longjidao Construction
Co, aims to promote its sales in Shandong province via the acquisition as Sanlian
accounted for approximately 70% market share in the province.
China Knowledge
March 05: China's central bank the People's Bank of China issued RMB 95 billion
(about US$13.34 billion) worth of central bank bills with the aim of maintaining the
stability of the nation's currency market. The one-year bills priced at RMB 96.10
have an estimated yield of 4.058%. Meanwhile, the bank was conducting RMB 69
billion in repurchase agreements (repo) which will last for 28 days with interest
rate standing at 3.2%.
China Knowledge
March 04: China Pacific Insurance started to sound out the market for a Hong
Kong IPO which at $3.2 billion would become the largest H-share offering since
China Citic Bank raised $4.2 billion in April last year. China's third largest life
insurer is expected to attract a lot of attention from international investors because
of its size and the rapid development of private insurance in China, but it could
have chosen a better day to share its story. Regional markets tumbled after weak
data and concerns about more subprime related-losses sparked renewed fears of
a global recession.
Business Week
Science & Technology
March 05: China and Singapore have inked a Memorandum of Understanding to
promote collaborations in interactive digital media technology research and
development. The two sides will exchange the training and information, which will
help the two countries to consolidate their IDM technology capabilities, according
to a joint statement. An agreement has also been reached between China's
Science and Technology Commission of Shanghai Municipality and Singapore's
Media Development Authority to develop cross-boarder on-line digital media testbeds to trial and prototype emerging interactive new media services and
technology.
China Knowledge
Defense & Exports Control
March 05: China said it plans to boost defense spending by nearly 18% this year,
using proceeds of the country's rapid economic growth in an effort to modernize its
military and potentially fueling unease in Washington and some Asian capitals. A
spokesman for China's legislature, the National People's Congress, disclosed the
increase, while stressing that Chinese military spending remains much smaller
than that of the U.S. or Britain, and "will not pose a threat to other countries."
The Wall Street Journal; Washington Post
March 05: The government plans to increase the defense budget by 17.6 percent
this year to increase benefits for military personnel, a senior official said. The
planned allocation for the People's Liberation Army this year is 417.77 billion Yuan
($58.79 billion), a rise of 62.379 billion Yuan ($8.23 billion) from actual military
spending last year, Jiang Enzhu, spokesman for the annual session of the
National People's Congress
People's Daily Online
March 05: China rejected a U.S. report concluding that the Chinese military is
secretly increasing spending to break into U.S. military computer systems, expand
its Navy, and invest in intercontinental nuclear missiles and weapons to destroy
satellites. The United States must "abandon Cold War thinking" and adopt a better
understanding of China to "promote a constructive Sino-U.S relationship," Chinese
Foreign Ministry spokesman Qin Gang said
CNN
March 04: China announced it was increasing its military spending by almost 18
percent on the heels of a U.S. report that voiced concern the latest in a series of
double-digit annual boosts would destabilize the region. The announcement was
made ahead of the opening of China's parliamentary session and came just hours
after the release of a Pentagon report expressing concern over how China would
apply its expanding military muscle.
CBC News; The Telegraph
Cross - Straits
March 05: The attempts of "Taiwan independence" secessionist forces to deny
the reality that the mainland and Taiwan belong to one and the same China and to
undermine peace in the Taiwan Straits are doomed to fail, Chinese Premier Wen
Jiabao. Wen made the remarks while delivering a report on the work of his cabinet
at the opening meeting of the annual full session of the National People's
Congress, China's top legislature.
National People's Congress
March 05: China continues its huge military buildup opposite Taiwan, further
pushing the balance of power between the two rivals toward the mainland's favor,
the U.S. Defense Department says in its annual report on China's military.
Although the Taiwan Strait remains stable, China is adding more than 100 missiles
a year to the estimated 1,000 it has targeting the democratic, self-governing island
that Beijing claims as its own, the report found. Hundreds of thousands of troops
are based opposite Taiwan, it said, and hundreds of planes are ready to make
good on China's threat to attack should Taiwan formalize its de-facto
independence.
Washington Post
March 04: Chinese President Hu Jintao offered broad peace talks with self-ruled
Taiwan under its "one China" policy, weeks before the island elects a new
president, but Taiwan rejected Beijing's conditions. Hu also reached out to proindependence politicians, saying China would welcome them if they shifted their
stance. China has claimed sovereignty over Taiwan since they split in 1949 at the
end of a civil war and insists the island accept reunification, by force if necessary.
The New York Times
March 04: Chinese President Hu Jintao said in Beijing that secessionist activities
in Taiwan have become the greatest menace to China's national sovereignty and
territorial integrity, but such activities are doomed to fail. "The 'Taiwan
independence' activities have run counter to the Chinese nation's strong will to
safeguard national unity. Such activities will get nowhere and are doomed to fail,"
Hu told political advisors attending the first annual full session of the 11th National
Committee of the Chinese People's Political Consultative Conference in Beijing.
People's Daily Online
General News
March 05: China's jewelry market is one of the fastest-growing in the world,
according to Mr. Wu, having expanded by more than 40% in 2007. Hang Fung
expects its sales to grow by 60% annually in China over the next three years, he
said. Hang Fung Gold Technology Ltd., a jewelry maker and retailer whose shares
have gained more than 20% since the start of year, has sold one ton of the hall's
gold ornaments. If gold hits US$1,000 an ounce, it will sell another ton, Chief
Financial Officer Frank Wu said.
The Wall Street Journal
March 05: Wang Qishan, a former mayor of Beijing with a reputation for fixing
some of China's more challenging problems, is expected to be named vice
premier during the annual session of China's legislature, which starts today
making him the Chinese government's point man for the financial sector and
foreign trade. In the mid-1990s, he helped establish China's first foreign-invested
investment bank, at a time when the country's financial sector was almost entirely
closed. Nearly a decade ago, he was brought in to handle the biggest debt
restructuring in China's history, after two government-owned investment
companies were unable to pay back billions of dollars to foreign lenders.
The Wall Street Journal
March 05: China will give the world a unique, well-run Olympic Games, said
Premier Wen Jiabao. "We will prepare for and organize the Games well,
strengthen cooperation with the international community and create an excellent
environment," Wen said. The 2008 Olympics and Paralympics are of great
importance in promoting China's economic and social development and increasing
friendship and cooperation between Chinese and the peoples of other countries,
he said.
National People's Congress
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