Learning Mandarin: December 2007

Monday, December 31, 2007

Learn Chinese - Four banks apply for aircraft leasing

? ?

BIZCHINA / Center

Four banks apply for aircraft leasing

By Tu Lei (chinadaily.com.cn)
Updated: 2007-09-17 16:12

Four domestic banks are applying for permission to set up an aircraft
leasing company, and it is expected the plan will be approved soon, the
Beijing Times reported citing an unnamed official from one aviation
company.

The four banks are Bank of Communications, Industrial and Commercial Bank
of China, Minsheng Bank and China Merchants Bank.

"China may approve the application to expand domestic aircraft's leasing
market share. The move could help change the unbalanced trade surplus,"
said the official.

Currently, the aircraft leasing market in China is dominated by
foreign-funded firms, although domestic aircraft leasing business doubled
in the past ten years.

China will have 2,880 new airplanes over the next 20 years, at a total of
about US$300 billion, according to figures from Airbus and Boeing.

The financial leasing market will be more than US$80 billion or 600
billion yuan when 30 percent of aircraft leasing business is finished via
financial leasing method.

China, compared with other countries, has few firms dealing in the
aircraft leasing business due to higher taxes, said the official.

Domestic airlines should turn in seven to 10 percent of leasing fees as
withholding tax.

If a leasing company imports planes, they must pay a 5.04 percent to 22.8
percent imported value added tax.

Five banks were listed in pilot group when the Measures for the
Administration of Finance Leasing Companies taken effect on March 1st of
this year.A financial leasing company between China Construction Bank and
Bank of America has been approved.

The joint venture has a registered capital of 4.5 billion yuan (US$595.24
million). China Construction Bank, investing 3.3795 billion yuan, owns
75.10 percent of the venture.

(For more biz stories, please visit Industry Updates)

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Learn Mandarin online - Small businesses to have better access to loans

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BIZCHINA / Center

Small businesses to have better access to loans

By Zhan Yisi (China Daily)
Updated: 2007-09-15 11:39

Led by the China Banking Regulatory Commission (CBRC), 46 banks and other
financial institutes as well as 55 other fund-raising agencies will be
present at the fourth China International Small and Medium Enterprises
Fair and China-Japan Small and Medium Enterprises Fair, which open on
September 15.

?Vice governor of Guangdong Province Tong Xing (center) meets foreign
business people at the fourth China International Small and Medium
Enterprises Fair (CISMEF) on September 15. Improving financial services
to small businesses and offering more tailored financial products will be
a win-win step for both small firms and banks. [China Daily]

They will attend the signing ceremony for granting loans to enterprises
and the fund-raising forum for small enterprises, as well as promote
financial products tailored to such firms and seek to forge new
cooperative ties.

At a recent press conference in Guangzhou, Liao Min, deputy director of
CBRC's general office, said that the commission is taking steps to give
small businesses better access to loans.

Among its moves are the recent joint endeavor with the National
Development and Reform Commission to seek permission of the State Council
to remove obstacles restricting small enterprises from applying for
credit from commercial banks, as well as its efforts to improve policies
and regulations promoting loan financing for small enterprises, and its
efforts to map out new policies to reward banking institutions that have
a good record of granting credit to small firms.

(For more biz stories, please visit Industry Updates)

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Learn Chinese - IT: Universal mobile chargers on sale soon

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BIZCHINA / Biz Media Digest

IT: Universal mobile chargers on sale soon

(Xinhua)
Updated: 2007-09-13 16:20

China's universal mobile phone chargers will be on sale by the end of
this month, with the national standard winning backing from foreign
players such as Nokia, the Ministry of Information Industry (MII) said on
its website late on Tuesday.

From June, cell phones made in China must use a universal charger
interface to cut waste and lower user costs.

Under the new technology rule, users can continue using a charger with a
USB, or universal serial bus interface, even if they change mobile phone
brands. Users can even charge their handsets via a connection with a
laptop, experts explained yesterday.

By August 31, a total of 51 firms had applied for certification to make
the new chargers, and 34 firms were approved by China Telecommunication
Technology Labs, a subsidy of MII, according to the MII statement.

The firms involved include Ningbo Bird, Amoi, Lenovo Mobile and Nokia,
according to MII's statement.

"We will adopt the national standard in our products manufactured after
the deadline (in June)," said Maggie Xu, Nokia's market manager based in
Shanghai.

Nokia's 8600 phone has adopted the new charger to comply with the new
rule.

(For more biz stories, please visit Industry Updates)

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Sunday, December 30, 2007

Chinesepod - More monetary tightening needed

? ?

BIZCHINA / Review & Analysis

More monetary tightening needed

(China Daily)
Updated: 2007-09-12 14:00

China's mounting inflationary pressure should guarantee more tightening
measures.

The country's consumer prices rose by 6.5 percent year-on-year last
month, marking the highest headline inflation in more than a decade.

The jump in inflation was much more than expected after it gained 5.6
percent in July. However, it seems still too early to predict when the
upward march of the consumer price index (CPI) will come to an end.

The CPI inflation has so far been driven primarily by higher food prices.

Latest statistics show that food prices, accounting for one-third of the
CPI, soared by 18.2 percent last month over the same period last year
while non-food price inflation remained low at 0.9 percent.

Since this inflation gap between food and non-food prices has been
observed for months, some people have shrugged off serious inflation,
believing the country is experiencing only some structural short supply,
such as that of pork.

That argument appears reassuring to the public who are suffering
increasingly from higher pork and other food prices. It would be a
desirable outcome if the current acceleration in food price inflation
should prove temporary and start easing in the months ahead as imports
and domestic production of food increases.

The good news is that there is still no sign of food price inflation
spreading to non-food items. But the bad news is that the continuously
sharp rise in food prices has already bitten deep into the pockets of the
people, especially those of low-income households.

The possibility is high that the decade-high CPI inflation last month
will push up average inflation in 2007 significantly above the
3.0-percent annual inflation target set by the central bank. And as
consumer price rises outstrip returns on bank deposits, more households
will switch savings to stocks and property, making it harder for the
government to prevent asset bubbles. The benchmark one-year deposit rate
stands at 3.6 percent.

Hence, it is high time for policymakers to turn more hawkish on inflation.

The central bank has steadily stepped up its efforts to rein in
inflation. For instance, it has raised interest rates four times so far
this year, with the latest one on August 21.

Nevertheless, as inflation continues to surge, policymakers should
respond more aggressively and promptly.

(For more biz stories, please visit Industry Updates)

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Chinesepod - Godfather of information industry

CHINA / Face to Face

Godfather of information industry
(China Daily)
Updated: 2006-06-05 10:34

The Lenovo story began in 1984 when Liu Chuanzhi, a 40-year old engineer
at the Computer Sciences Institute of the Chinese Academy of Sciences,
founded a computer company in Beijing. With a few colleagues and limited
capital, he began selling imported computers. The company, called
"Lianxiang" in Chinese and "Legend" in English, had its first success in
the development of a Chinese character card that translated English
operating software into Chinese characters.

In The Lenovo Affair, Ling Zhijun, a senior editor at the People's Daily
newspaper, charts the dramatic rise of Lianxiang/Legend. First it emerged
as China's biggest computer brand, then a listed company on the Hong Kong
stock exchange. Finally, with the acquisition of IBM's Personal Computing
Division, Lenovo became a global brand.

Although Lenovo is the third largest personal computer company in the
world, it remains surprisingly unknown outside China. Few people
understand how it suddenly became a global giant. This detailed look at
one of China's most successful companies provides a rare insider's view
into the Chinese economic system.

Ling makes important connections between the historical and political
events occurring in China in recent decades. He describes how changes in
government policy affected the company's growth, and the moves that Liu
Chuanzhi had to make in order to get around problems such as a lack of
finance.

Liu, who has been described as "the godfather of China's information
industries", is painted as a determined leader. But his road to success
was difficult. During the "Cultural Revolution" (1966-76), he developed
an unbreakable spirit and the ability to deal with complex human
relationships. Ling describes him as a man who knew his own scientific
shortcomings, but who wanted to turn technology into profit.

Liu Chuanzhi's greatest challenge was operating within the restraints of
the Chinese system. Surprisingly, he came up against many of the same
difficulties that foreign companies in China encounter, including the
lack of a legal framework for patents, the chaotic system for obtaining
import and export licences, and outdated accounting systems.

The Lenovo Affair fills an important gap in our understanding of China's
role in the modern business world. In addition, it is a powerful wake-up
call for those who just think of China as a huge untapped market for
foreign companies. Lenovo's success shows that Chinese companies also
aspire to become global players, and that acquisitions are one way for
them to gain access to global markets.

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wooden puzzle, one-piece toilet, RC hovercraft, photo album, prom dress,
pocket bike, Vaginal Speculum, Samurai Sword, String Panty and PVC Pipe.

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Learn Chinese - China to make Dalian shipping center of NE Asia

? ?

BIZCHINA / Center

China to make Dalian shipping center of NE Asia

(Xinhua)
Updated: 2007-09-09 09:51

China aims to make Dalian not only a major harbor along China's northeast
coast but also a shipping center of Northeast Asia, Chinese Premier Wen
Jiabao said in Dalian Saturday.

Harbor construction dominates development in Dalian. All projects under
construction should be carefully designed and planned and become the
first-class in the region, Wen said, who had just attended the Summer
Davos meeting held in Dalian Thursday and Friday.

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Chinese School - Bank shares lift Shanghai index to new high, 09/06

? ?

BIZCHINA / Index & Statistics

Bank shares lift Shanghai index to new high, 09/06

By Li Zengxin (chinadaily.com.cn)
Updated: 2007-09-06 16:25

After a two-day adjustment, Chinese stocks resumed their upward path
today. Led by banking shares, the Shanghai Composite Index finished at
5,393.66 points, a record-high close.

Total turnover of stocks in the major indices was 250.4 billion yuan,
higher than yesterday.

Shanghai Composite Index
Source: sina.com.cn

Opening higher at 5,336.67, the index slid a little to 5,314.34 at first,
but then grew to break the 5,400-point mark a few times, with the highest
at 5412.32. In the latter half of the afternoon session, however, a few
big selling bids dragged the index back to lower levels. Finally it
closed 82.94 points or 1.56 percent higher than yesterday's closing.

Of the A shares listed in Shanghai, 429 went up, 330 closed down and 83
remained unchanged. Of the gainers, 23 were sealed at the maximum growth
cap of 10 percent, led by Guangzhou Iron and Steel. China Unicom, the
largest trader both in terms of trading volume and transaction value,
climbed 6.2 percent to 8.88 yuan, contributing to the index' rise.

Shenzhen Component Index
Source: sina.com.cn

The Shenzhen Component Index also opened higher at 18,089.54, and ended
at 18,073.76, up 71.76 points or 0.4 percent, failing to break the record
closing reached this Monday. It went through the day in a range between
17,951.78 and 18,225.61.

Of the A shares, 311 closed up, including 11 of them rising as much as 10
percent, while 253 fell and 75 ended flat. The largest trader China Vanke
edged up 0.6 percent to 33.29 yuan.

Stocks in the culture and media, petrochemicals and hydroelectricity
industries led today's surge while large-cap bank shares contributed the
most to the index rise. All of the 13 listed banks saw their share prices
going up today, pioneered by Huaxia Bank with a 10 percent surge. The
largest weight Industrial and Commercial Bank of China went up 2.2
percent, pointing out today's general direction for the market.

(For more biz stories, please visit Industry Updates)

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Chinese language - Who's afraid of private equity?

? ?

BIZCHINA / Center

Who's afraid of private equity?

By Zhang Ran (China Daily)
Updated: 2007-09-06 10:53

Once called "raiders" in the United States, private equity investors are
now coming in packs to China, a country where PE was a completely unknown
phenomenon even 10 years ago.

Zero2IPO, a Chinese investment research firm, recorded a year-on-year
increase of 102.2 percent in PE funds raised to target China in the
second quarter of 2007, not including venture capital funds.

Based on statistics from 15 funds, the amount was US$5.79 billion, the
bulk of which was raised abroad. Going by the Zero2IPO figure, the amount
of PE funds raised in the first half of the year stood at US$13.4
billion, almost equal to the amount for the whole of 2006.

Buyout firms like Carlyle and Blackstone are often seen as predators in
the US. AT Kearney, a global consulting firm, pointed out in a report
this year that there are still common misconceptions that PE funds have
no long-term commitment and that their sole goal is maximizing short-term
gains, often achieved by cutting jobs, breaking up companies and hiving
them off.

But for the Chinese, PE is just another form of foreign investment.
Corporate leaders, especially from the private sector, embrace it as a
partner with money and managerial quality.

Commenting on Carlyle's investment in Target Media, Yu Feng, founder of
China's second-largest multi-channel advertising media company that was
later merged into Focus Media under Carlyle's advice, says Carlyle offers
support to Target Media in various aspects including strategy-making,
structuring the management, merger and acquisition moves, corporate
governance and listing procedures.

"They are sharing their global experience with high-growth companies like
us."

Zero2IPO data show 31 of the 45 PE investment deals in the second quarter
were targeted at high-growth companies, with a total investment of
US$1.018 billion.

Network synergy

After infusing the management team of a company with new entrepreneurial
spirit, PE investors systematically use the international network of
companies in their portfolio to improve its performance.

European PE firm 3i, which invested US$20 million in Inner Mongolia
Little Sheep Catering Chain Co, based in the Inner Mongolia Autonomous
Region, invited Nish Kankiwala, former president of Burger King, and Yuka
Yueng, CEO of KFC Hong Kong, as non-executive directors in the Chinese
company to help it draw up its strategy and sort out its management
issues.

3i itself chaired two seats on the company's board of directors, using
its global network to help its portfolio companies explore an overseas
market.

"Our purpose (to introduce PE) was not money, but wisdom. The purpose was
to introduce high-level management and high-quality talent," says Zhang
Zhanhai, CEO of Little Sheep.

In another case, Carlyle actively used its network in the US to help
Shanghai Anxin Flooring Co Ltd, a leading solid wood floor manufacturer
in China to launch the ARK sub-brand in the American market. The firm has
successfully set up 50 sales outlets in the US with Carlyle's help.

(For more biz stories, please visit Industry Updates)

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Saturday, December 29, 2007

Learn mandarin - Rules to provide?affordable housing to needed families

? ?

BIZCHINA / Review & Analysis

Rules to provide?affordable housing to needed families

By Hu Yuanyuan (China Daily)
Updated: 2007-09-04 10:33

The State Council's latest circular on housing requires local governments
to make subsidized rental accommodation available to poor families across
the country by the end of 2010.

It also tightens management of the low-cost housing system, a policy to
provide low-cost accommodation that's subsidized by the government.

Housing should be about 60 square meters (sqm) and cannot be resold
within a five-year period. Local governments will have purchase priority.

Related readings:
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?Complaints about housing, cars on rise
?Housing bureau issues controversial guidelines

Special Coverage:
in China

"The most important thing about the circular, I believe, is that
government subsidies can now really go to the poor families rather than
to the rich," Pan Shiyi, chairman of SOHO China, told China Daily.

Affordable housing was once criticized as being too big and poorly
supervised. Some apartments were as large as 200 sqm. Some of the buyers
drove to sales centers in BMWs and bought several apartments at once.

"Such measures (in the new circular) increase supply by reducing
(housing) size and also curb demand through 'limited ownership'," said
Wang Hongxin, a professor at Beijing Normal University. "But the circular
won't be able to slow rising prices in the short term."

It usually takes around two years after a policy is released for land to
be offered and construction finished. But the proportion of low-rent
housing and affordable housing on the market determines its influence on
property prices, Wang said.

Although the circular stipulates the annual land supply for low-rent
housing, affordable housing, and medium- and small-sized housing should
be no less than 70 percent, the exact proportion of the first two types
is unclear.

"Therefore, we cannot be too optimistic about an increase in the supply
of affordable housing," Wang said, adding that a lack of incentive for
local governments to increase supply is also a factor.

Most industry experts expect indemnified housing will be limited to a
comparatively low price range, but standard housing may increase further
due to less government interference.

(For more biz stories, please visit Industry Updates)

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Learn Chinese - China Eastern sees doubled 1st-half net profits

? ?

BIZCHINA / Center

China Eastern sees doubled 1st-half net profits

(Xinhua)
Updated: 2007-09-02 11:50

China Eastern Airlines, a leading air carrier in the country, realized
58.21 million yuan (US$7.7 million) in net profits in the first half of
this year, up 104.36 percent over the same period of last year, according
to the company's interim report.

China Eastern Airlines realized 58.21 million yuan (US$7.7 million) in
net profits in the first half of this year, up 104.36 percent over the
same period of last year. [Xinhua]

China Eastern's revenue for the six months amounted to 18.8 billion yuan,
up 14.23 percent.

Zhang Wenyou, assistant to the company's general manager, attributed the
impressive performance to effective marketing, improved management and
stricter cost control.

The Shanghai-listed company achieved a record daily aircraft utility
ratio of 9.8 hours in the January-June period, which contributed
significantly to cost reduction and profit growth.

Meanwhile, the company cut oil consumption by 2.6 percent on average, the
interim report said.

(For more biz stories, please visit Industry Updates)

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Chinese Online Class - Steps taken to shorten queues

? ?

BIZCHINA / Biz Life

Steps taken to shorten queues

By Wang Zhenghua (China Daily)
Updated: 2007-08-30 09:38

More bank tellers added to serve during rush hour, counters reserved
exclusively for VIP clients shared by ordinary customers, and water
dispensers, newspaper stands and other recreational facilities installed
in Shanghai.

Chinese Mandarin - Service: Tianjin pours US$26b to build 20 clusters

? ?

BIZCHINA / Biz Media Digest

Service: Tianjin pours US$26b to build 20 clusters

(Xinhua)
Updated: 2007-08-27 17:18

North China's port city of Tianjin plans to set up 20 modern service
industry clusters at the cost of 199 billion yuan (US$26 billion) in
three to five years to boost the sector's development.

The municipal government has set a goal for the service sector to account
for 45 percent of the city's gross domestic product by 2011.

The priority will be put on boosting a high value-added modern service
industry, including financial services, modern logistics, tourism,
creative industries and service outsourcing, which are expected to
provide more employment, said a spokesman for the municipal government.

Related readings:
China's largest regional airline set up in Tianjin
?Tianjin's Binhai New Area, Tangshan sign cooperation agreement
?Airbus inks Tianjin plant deal
?Sinopec's oil depot in Tianjin begins commercial operation

In the Tianjin International Trade and Shipping Service Cluster, which is
under construction and will cover 128 hectares, customers can enjoy the
services of custom clearance, shipping, supervision and control, and they
rent offices and accommodation there.

The service outsourcing park in Tianjin Economics and Technology
Development Park, will realize annual sales of five billion to six
billion yuan?on completion in 2011.

The Binhai New Area of Tianjin, 120 kilometers southeast of Beijing and
covering 2,270 square kilometers, is the pilot reform base and the third
economic engine in north China next to southern Shenzhen and eastern
Shanghai's Pudong.

It is also home to eight functional zones under construction, including a
high-tech zone, a port logistics zone, an airport logistics zone, a
central business district and a resort area, said sources from the
Administrative Committee of the Binhai New Area.

The 10-square-kilometer area of Tianjin Port, the largest bonded harbor
area in northern China, will become an international free trade zone with
focus on international distribution, global procurement and export
processing when it is operational by the end of this year.

The modern service industry played a key role in a nation's economy and
would boost China's social and economic development in the next 10 years,
said Professor Chang Xiuze, of the Macro-Economics Institute of the
National Development and Reform Commission.

However, China suffered a noticeable imbalance between traditional
services, such as catering and and trade, and the modern services,
including information, logistics and financial industries, Chang said.

In Beijing, the service sector accounted for 70 percent of the gross
domestic product last year, the highest rate in the country, followed by
Shanghai at 50.6 percent and Tianjin at 40 percent.

(For more biz stories, please visit Industry Updates)

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Friday, December 28, 2007

Chinese language - Foot-and-mouth in Hubei, Gansu

CHINA / Regional

Foot-and-mouth in Hubei, Gansu
(chinadaily.com.cn)
Updated: 2006-05-31 06:13

The Ministry of Agriculture yesterday announced outbreaks of Asian Type I
foot-and-mouth disease in Hubei and Gansu provinces.

The outbreaks have been restrained to a village in Hubei's Changyang
County in central China and another in Jiayuguan City of the northwestern
Gansu Province, the ministry said.

China will forbid the import of animals and animal products from nations
with avian flu or foot and mouth disease, according to Tuesday's
notification from the Ministry of Agriculture.

The avian flu was discovered in Botswana and Denmark in May.

The notification demanded that avian products from those nations will be
returned or burnt. If these products were discovered on ships, aircrafts
or trains passing by China or stop in China, they will be sealed.

China's quarantine inspection organization will enhance efforts to
protect the safety of animals in China.

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Learn Chinese online - Stock pilot program to start in a week

? ?

BIZCHINA / Center

Stock pilot program to start in a week

By Zhang Ran (China Daily)
Updated: 2007-08-24 10:21

An Industrial and Commercial Bank of China booth at an exhibition in
Zhengzhou, capital of Central China's Henan Province. [newsphoto]

Mainland residents will be able to apply for accounts to buy Hong Kong
stocks in Tianjin from next week, Bank of China (BOC), the first mainland
lender to offer the service, said yesterday.

"We expect to start accepting applications from customers in Tianjin from
next week and to gradually extend (the service) to 40 major cities," Xiao
Gang, chairman of BOC, said in Beijing yesterday at a briefing to report
the bank's first-half financial results.

The bank's branch in the northern port city of Tianjin is to be the
initial gateway for the program, which is expected to channel off the
country's excess liquidity and give mainland residents more investment
choices.

BOC will publish application details next week, according to the
chairman. The bank posted a stronger-than-expected 52 percent net profit
increase in the first half, driven by a surge in net interest and
fee-based income.

China's booming stock market has helped boost banks' fee and commission
income. BOC's net fee and commission income rocketed 72 percent from the
same period last year.

The Industrial and Commercial Bank of China (ICBC), which also released
its half-yearly results yesterday, posted an annual increase of 89
percent on net fee and commission income.

ICBC, the world's largest bank by market value, posted a net profit of
41.4 billion yuan in the first half, up 61.4 percent on the previous year.

Both banks said the subprime credit crisis had made little impact on
their balance sheets.

ICBC held $1.23 billion in mortgage-backed securities as at June 30,
accounting for 4.32 percent of its foreign exchange investment portfolio.

"It had incurred no loss on the portfolio, which accounts for 0.0012
percent of the group's total assets," said Yang Kaisheng, vice-chairman
and president of ICBC.

BOC's investment in mortgage-backed securities was $8.965 billion on June
30, accounting for 3.51 percent of its total investment in securities.

(For more biz stories, please visit Industry Updates)

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Chinese School - No relief in sight on realty prices

? ?

BIZCHINA / Review & Analysis

No relief in sight on realty prices

By Chen Weihua (China Daily)
Updated: 2007-08-22 11:30

Rising housing prices and changing policies have brought both angst and
excitement to homebuyers in Shanghai.

Many new buyers are talking to agents to revise contracts after the local
government recently announced that first-time homebuyers can borrow up to
500,000 yuan from the city's housing fund from September 1.

The loan, which carries a relatively low interest rate, is currently
capped at 300,000 yuan.

The new policy will be a relief for homebuyers that have to take out
hefty commercial loans to finance purchases.

Many of the city's homebuyers jokingly refer to themselves as "mortgage
slaves", because most of their salaries are used for loan repayments. But
this situation is not going to change much for those who borrow ?under
20- to 30-year terms.

Many homebuyers have been waiting for the last two years for prices to
come down, after a number of policies were introduced to rein in the
red-hot property market.

But as housing prices in Shanghai and most Chinese cities continue to
rise, they could be waiting in vain. "And there is absolutely no sign
that the prices will go down," said Li Zong, from a local real estate
company.

"It actually costs more now to buy a small apartment in Pudong because
the price has shot up from 15,000 yuan per square meter last year to
17,000 yuan," said Xiao Lu, a woman in her early 30s.

As housing prices continue to go through the roof, reports that some
cities might raise the down-payment ratio from 30 percent to 40 or even
50 percent are causing many panics.

In fact, cities such as Shenzhen in Guangdong Province and Wenzhou in
Zhejiang Province have already tightened up lending on home purchases.

But the Shanghai head office of the People's Bank of China has dismissed
any increase in the down-payment ratio.

Unlike Wenzhou and Shenzhen, banks in Shanghai have shown no sign of
cutting back on mortgages.

High land prices and the enthusiasm of local and overseas investors in
Shanghai's real estate market have pushed the city's property prices,
especially in the downtown area, to rise at a rapid pace in the last few
months and many believe it's set to continue.

(For more biz stories, please visit Industry Updates)

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===========================================================================
� State Council issues affordable housing guidelines
===========================================================================
� Low-rent housing to cover urban low-incomers
===========================================================================
� Housing prices to keep upward trend - survey
===========================================================================

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Learn mandarin - Robust realty in Beijing

? ?

BIZCHINA / Major Cities

Robust realty in Beijing

By Hu Yuanyuan (China Daily)
Updated: 2007-08-20 06:50

It has been a carnival year for Beijing shopping malls as an all-time
high of more than 6 million sq m of commercial space has hit the market.

Even more impressive might be the size of the malls themselves - giants
with floor areas exceeding 1 million sq m account for 70 percent of the
total space, according to statistics compiled by China Real Estate
Business. Most are clustered in the capital's eastern and western
commercial hubs of Chaowai, Yansha, World Trade Center, Xidan,
Zhongguancun and Financial Street.

"This year's rapid expansion is not likely to change the overall
framework of Beijing's commercial property market. But the mass of supply
in several key areas will lead to some surplus," says Zou Yi, general
manager of Shanghai-based WISENOVA, a real estate consulting firm.

Most of the new commercial projects target medium- and high-end
customers. Most will open in the second half of the year and at the
latest before May, 2008.

"Their similar positioning will lead to intensified competition," Zou
adds, suggesting that new commercial projects should switch from
traditional centers to other locations and suburban regions.

To survive the red-hot competition, a developer has to differentiate its
product, says Eric Chan, deputy managing director of Savills Property
Services (Beijing) Co.

Several Hong Kong shopping malls provide new experiences for customers,
attracting them with novel and interesting approaches, he explains.

Some Beijing commercial projects are also striving to stand out from the
competition through distinctive amenities.

The Place poured in 250 million yuan to build an LED "Skyscreen" 250 m
long and 30 m wide suspended six stories overhead.

Nan Xincang Culture Street built by Hong Kong International Development
Co Ltd employed an historic architectural style that echoes the buildings
of old.

Even as competition increases, demand for high-end property continues to
grow, in part due to expanding numbers of international retailers.

Foreign retailers that are planning to open shops in Beijing include
Lotte from Korea, Isetam and Takashimaya from Japan and Central Group
from Thailand, according to property service firm DTZ.

Demand was voracious for retail space in all sectors in the first half of
2007, especially from brands related to sports products. Jewelers and
watch makers also arrived, with many famous names opening their first
shops in Beijing.

(For more biz stories, please visit Industry Updates)

?? ?? 1?? 2?? ??

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Thursday, December 27, 2007

Chinese language - Xie Qihua: Made of Steel

CHINA / Face to Face

Xie Qihua: Made of Steel
(Beijing Review)
Updated: 2006-01-07 09:56

Developing Under New Rules

On July 20, the New Rules for the Steel Sector was promulgated by the
State Council, giving a clear direction to development of the iron and
steel industry in China. Under the new ruling, the Baosteel Group needs
to find a different method of new development.

Xie has her own opinions. She said that although China's steel industry
output has led the world for nine years in succession, reaching a peak of
273 million tons in 2004, the product structure of China's steel industry
still needs attention. Of this volume, about 60 percent was ordinary
steel, but high-leveled special steel, which is required in the auto
industry, shipbuilding industry and household appliances industry, still
needs to be imported from other countries. The problems facing investment
in China's steel industry also influences healthy development of the
industry as a whole.

Xie thinks the Chinese Government should come up with a steel industry
standard to ensure strict limits to scale, equipment and products'
structure of all steel companies.

The New Rules for the Steel Sector provide support for Xie's ideas,
clearly indicating the boundaries for various steel companies, including
state-owned companies, private companies and foreign-funded companies.
This process allows companies like Baosteel, producing high-leveled
steel, to flourish.

The New Rules for the Steel Sector also allow the construction of two
super steel group corporations with an expected 30-million-ton yearly
output in China. This has given Xie much confidence and she said as the
current output of Baosteel has reached 21 million tons, it is possible to
reach the goal of 30 million tons during the "11th Five-Year Plan" period.

Taking Action

Recently, multinational steel corporations have speeded up their steps to
annex Chinese steel companies. In dealing with this situation Xie said
that Chinese steel companies should try to streamline and optimize their
own operations instead of waiting for purchase by foreign corporations.
She said during the reconstruction and mergers that created Baosteel the
number of staff was reduced from 176, 000 to 90,000 and 10 billion yuan
($1.23 billion) was spent on technological alterations over a seven-year
period. It is only because of their effective reorganization that
Baosteel has power to make acquisitions elsewhere, Xie said.

At present, there are two opportunities for Baosteel--building a
joint-stock plant in Brazil and a new plant in Zhanjiang, Guangdong
Province.

Xie said that the investigation into building the joint-stock plant in
Brazil with CVRD has been basically completed and the item suggestion
report has been authorized by the Central Government. At present, the
Brazilian side is researching local environment, land and the project
status. "Our original plan is to put in 1.5 billion yuan ($187.03
million) but we expect this to increase slightly," Xie said.

At the same time, Xie said the plan to build a plant in Zhanjiang has not
received authorization from the government, but it is in accordance with
the requirement of encouraging steel corporations to invest in coastal
areas, as laid down in the New Rules for the Steel Sector, so she is not
unduly worried about it. Xie also said that the Zhanjiang plan hopes to
combine the reorganization and alteration of such old Guangdong
enterprises as Shaoguan Iron and Steel and Guangzhou Iron and Steel.

Page: 1 2

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Chinese language - Securities dealers vying for brokerage business

? ?

BIZCHINA / Center

Securities dealers vying for brokerage business

By Dai Yan (chinadaily.com.cn)
Updated: 2007-08-14 17:00

The red-hot mainland stock markets have experienced fierce competition
among securities companies in the brokerage business, as their rankings
changed every month during the first seven months of 2007, according to
China Securities News.

According to statistics from the Shanghai Stock Exchange, the top ten
securities dealers in terms of brokerage business in January were Galaxy,
Guotai Junan, Shenyin & Wanguo, Haitong, Guosen, GF, China Securities,
China Merchants Securities, CITIC Securities, and Huatai.

However, in July the rankings became Guotai Junan, Galaxy, Haitong,
Shenyin & Wanguo, Guosen, Huatai, GF, China Securities, China Jianyin and
China Merchants Securities.

Special coverage:
Markets Watch
Related readings:
?Brokers to contribute part of revenue to protect investors
?Gov't to raise foreign brokerages' investment cap
?Brokers see net income surge
?Booming equity market attracts more money

Huatai's new account openings far exceeded the average, thanks to its
sales assessment system, said vice president Sun Hanlin. The company
makes new client numbers a key assessment index for sales staff and
managers, raising their salaries based on performance.

Service is key to securities dealers in competition, according to a
source from Huatai. Huatai and China Merchants have both set up special
outlets for institutional investors, providing comprehensive dealing and
financing consulting services.

Securities companies also cooperated with banks to provide value-added
services for clients. For example, Guotai Junan has introduced co-branded
cards with China Merchants Bank and the Industrial and Commercial Bank of
China respectively.

Commission rates were up about 0.02 percent this year, according to a
securities company in Shanghai. The minimum commission rate rose to 0.18
percent from below 0.1 percent. Most investors do not care about
commission increase, because they receive high returns from the bullish
market, said a sales manager of China Merchants Securities (Shanghai).

Commission rate increases will be a short-term trend, as institutional
investors invest more, said an analyst of Shenyin & Wanguo Securities
Research & Consulting. Securities dealers’ commissions income will
reach 134 billion yuan (US$17.66 billion) this year, and 144.1 billion
and 146.8 billion respectively in 2008 and 2009, according to analysis
from Shenyin & Wanguo.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - Airlines to expand codeshare with Korean Air

? ?

BIZCHINA / Center

Airlines to expand codeshare with Korean Air

(Xinhua)
Updated: 2007-08-13 13:53

Korean Air (KAL), the largest airline in the Republic of Korea (ROK), has
agreed to expand codeshare from late October with two Chinese major
airlines, covering all flights connecting China and ROK, according to KAL
Beijing Office Sunday.

Starting from October 28, KAL will operate all flights linking two
countries with China Southern and China Eastern.

KAL began to codeshare with China Eastern in 1996 and with China Southern
in 2004.

This cooperation will provide better services to passengers on these
flights, said the office.

Currently KAL operates passenger flights to 21 destinations in?the
Chinese?mainland and would start flying from Incheon to
Zhengzhou,?capital of Central China's Henan Province this September.

KAL is also preparing to set up a joint venture cargo airline with
Sinotrans, the nation's largest logistics company.

(For more biz stories, please visit Industry Updates)

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Wednesday, December 26, 2007

Chinese Mandarin - Carmakers join race to get into Europe, US

? ?

BIZCHINA / Center

Carmakers join race to get into Europe, US

By Gong Zhengzheng (China Daily)
Updated: 2007-08-10 11:18

BYD, which mainly exports cars to Latin America and the Middle East, aims
to double its overseas sales to 16,000 units this year from 2006.

Vehicle exports from China have been in the fast lane in recent years,
mainly boosted by indigenous brands.

In the first half of this year, the nation's overall vehicle exports
surged by 71.3 percent to 241,200 units from a year ago, according to
industry data.

Japan's Honda Motor is the sole foreign carmaker selling China-made cars
in the developed market.

BYD, which is headquartered in the southern city of Shenzhen, got into
the auto sector in 2003 when it bought a State-owned car plant in Xi'an
in the northwest. It now has two research centers in Shanghai and
Shenzhen.

The company plans to move a total of 150,000 cars this year, up from
60,000 units last year.

(For more biz stories, please visit Industry Updates)

?? ?? 1?? 2?? ??

Learn Chinese, Chinesepod

Chinese School - EximBank to issue 2b yuan RMB bonds in HK

? ?

BIZCHINA / Center

EximBank to issue 2b yuan RMB bonds in HK

(Xinhua)
Updated: 2007-08-09 15:31

The Export-Import Bank of China, one of the country's three policy banks,
announced here Thursday that it will issue 2 billion yuan (US$264
million) worth of Renminbi-denominated bonds in Hong Kong starting from
Friday.

This is the second time for Chinese mainland financial institutions to
issue RMB bonds in Hong Kong following the issue of 5 billion yuan bonds
by China Development Bank in June.

The 2 billion yuan bonds will be issued to both institutional and
individual investors, each at 1 billion yuan. The duration of the bonds
for individual investors is two years, with a 3.05 percent yield, 0.05
point higher than the bonds of China Development Bank.

The bonds for institutional investors will have a duration of three years
with the yield planned to be set on August 21 when the subscription
period ends.

(For more biz stories, please visit Industry Updates)

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Chinesepod - PetroChina may list in October

? ?

BIZCHINA / Center

PetroChina may list in October

By Chen Jialu (China Daily)
Updated: 2007-08-08 09:16

PetroChina plans to debut on the Shanghai bourse in October by raising at
least 40 billion yuan, in a bid to tap the red-hot mainland equity market.

PetroChina, the Hong Kong-listed arm of China National Petroleum
Corporation (CNPC), the nation's No 1 oil and gas group, will issue 4
billion A shares at around 10 yuan each, which will probably account for
approximately 2 percent of its enlarged share capital, a CNPC executive
told China Daily yesterday.

"The new shares will be priced on the basis of PetroChina's share price
in Hong Kong. The indicative price for the initial public offering might
hover around 10 yuan".

Two men pass by a billboard for China National Petroleum Corp, parent of
PetroChina, in Shanghai. [newsphoto]?

If thus priced, it will be the mainland's biggest IPO this year.

The oil giant has chosen UBS Securities Co, China International Capital
Corp and CITIC Securities Co to underwrite the highly anticipated
offering, the source said. "We have tentatively set October for the
listing."

The Beijing-based company will hold a shareholders' meeting on August 22
to approve its IPO plan, the source said.

But in a statement in June, the company had said its shareholders would
vote on the offering on August 10.

The draft prospectus was submitted to the China Securities Regulatory
Commission last Friday.

Special coverage:
Markets Watch
Red Chips Return

Related readings:
?PetroChina output grows steadily in 1st half
?PetroChina to build oil base in Xinjiang
?Gasoline retailers cautioned against hoarding, profiteering
?Most expect fuel prices to rise

The proceeds from the IPO will fund the company's construction of
refinery, petrochemical and gas pipeline projects, overseas acquisition
of petroleum and gas resources and the development of its domestic
petroleum and gas resources.

PetroChina is the latest State-owned conglomerate listed overseas seeking
a mainland listing. China is encouraging its flagship State-owned
companies listed in Hong Kong and elsewhere to list on the mainland,
which could help soak up excess liquidity and increase the supply of new
shares.

PetroChina posted a 3.7 percent production increase in the first half of
the year.

The company began trading in Hong Kong and its American Depositary
Receipts were also listed on the New York Stock Exchange in 2000.

(For more biz stories, please visit Industry Updates)

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Chinesepod - Experts warning: beware mergers that clip local brands

? ?

BIZCHINA / Opinion/Analysis

Experts warning: beware mergers that clip local brands

(Xinhua)
Updated: 2007-08-06 17:27

Chinese experts in intellectual property rights have called on the
government and enterprises to be more aware of protection to avoid losing
control of domestic brands when cooperating with overseas investors.

At the Summit of Independent Innovation and Domestic Brand Development
Strategy last week, IPR experts and entrepreneurs expressed their
concerns about the loss of Chinese brands resulting from mergers and
acquisition between Chinese and overseas businesses.

Statistics from the summit show that seven of China's top eight beverage
companies have been merged with Coca Cola or Pepsicola, and foreign
brands account for more than 90 percent of the market share of the
country's carbonated drinks.

In the cosmetics industry, foreign brands make up 75 percent; in food and
medicines, 30 percent to 40 percent. And three of the top four laundry
detergent producers have been acquired by foreign companies.

Wu Handong, president of Zhongnan University of Economics and Law and an
IPR expert, said that some domestic brands with unique techniques and
reliable quality are fairly competitive in both domestic and
international markets, but when they join hands with foreign enterprises
to seek either financial or technological support, they are gradually
edged out of the market and finally disappear.

Liu Liedong, general legal consultant of the China Oil and Food
Corporation, which is a leading grain, oil and foodstuff trading
conglomerate in China, said that the fundamental purpose of international
companies in China is to raise their market share and promote their
trademarks, with capital, technology and brands acting as their most
powerful weapons.

Attracted by foreign capital and technology, many Chinese enterprises do
not pay due attention to the handling of their brands when cooperating
with foreign investors.

He said Chinese enterprises usually put their trademarks into joint
ventures. With the development of the new company, foreign investors will
gradually get a controlling position or just replace the Chinese brands
with their own.

Senior brand expert Yang Xingguo said that many Chinese enterprises mean
to take advantage of foreign technology and management experience to
develop their own brands but often lose the brands on the way.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - China, US cooperate on deposit insurance

? ?

BIZCHINA / Center

China, US cooperate on deposit insurance

By Song Hongmei (chinadaily.com.cn)
Updated: 2007-08-03 11:57

People's Bank of China governor Zhou Xiaochuan signed a memorandum of
understanding with US Federal Deposit Insurance Corp (FDIC) Chairwoman
Sheila Bair yesterday to cooperate on promoting a deposit insurance
system for financial institutions in China.

China is considering setting up a deposit insurance company and will use
the FDIC's experience as a reference, said Zhou, who did not give a
specific timetable.

According to the memorandum, the central bank will cooperate with the
FDIC in deposit insurance as well as financial services and financial
management.

The time is ripe for China now to establish a deposit insurance system,
as the country has?further opened up its financial sector and improved
its supervision, said the central bank in a statement released yesterday.

Related readings:
?Nation mulls establishment of deposit insurance system
?Insurers to pour $39b into overseas market
?Insurers need to focus on value-added biz
?China allows trusts, insurers into interbank market
?Personal insurance premiums up 16%

Zhou said a deposit insurance system would promote development in China's
financial market by boosting the confidence of those who put their money
into smaller, local banks.

The current lack of deposit insurance in China is mainly due to the fact
that most banks in the country are State-owned, and offer?guarantees to
depositors, analysts said.

Deposit insurance has been suggested by policy makers to protect
deposits, in full or in part, in the event of banks' inability to pay
deposits.

Established during a Great Depression banking crisis in the 1930s, the
FDIC insures customers' deposits with a US$51 billion fund. Coverage
includes up to US$100,000 for each depositor and US$250,000 in retirement
accounts.

Deposits in foreign branches of US banks, however, are not covered by the
FDIC.

The FDIC also assesses insurance fees to banks based on risk levels.

Currently, nearly 100 countries have official deposit insurance systems.

(For more biz stories, please visit Industry Updates)

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Tuesday, December 25, 2007

Learn mandarin - Banks told to curb house loans

CHINA / National

Banks told to curb house loans
By Zhang Ran (China Daily)
Updated: 2006-05-26 07:32

China's banking regulatory body has urged commercial banks to take
measures to curb the increasing level of lending in the real estate
sector.

A foreigner looks at models of residential buildings at a property
company's sales office in Shanghai. In China's richest city, the
foreigners live in the inner ring, outsiders in the next and natives in
the outermost. [China Daily]
China needs to significantly increase down payments for mortgages on
expensive homes and investment properties as part of measures to rein in
bank lending, according to Liu Mingkang, chairman of China Banking
Regulatory Commission (CBRC).

"Commercial banks need to keep a close watch on borrowers' repayment
ability and their credit status."

Liu made the statement at a meeting on Wednesday with China's major
commercial banks. The statement was posted on the commission's website
Thursday.

"Banks should greatly promote loans for first-time home owners, but stop
granting mortgages for anyone other than the home owner.

"It should significantly increase down payments for those buying anything
more than their first home and for expensive properties, villas,
commercial properties and other speculative purchases," the statement
said.

But CBRC did not specify by how much down payments should be raised.

Property prices in 70 large- and medium-sized Chinese cities witnessed an
average 5.5 per cent increase in the first quarter from the same period
in 2005, according to the National Bureau of Statistics.

The CBRC said it would take a targeted approach to controlling lending by
placing stricter requirements on banks that had capital adequacy ratios
of less than 8 per cent.

It would encourage certain types of property lending, while restricting
others.

As well as targeting property lending, the commission said it was asking
banks to stop arranging set quotas of loans with local and provincial
governments - a major source of lending since the start of the year.

Much of the money has gone into fixed investment in property and other
assets.

The CBRC's move was seen as an attempt to keep China's rapid growing
economy from overheating.

Last month the central bank raised the one-year benchmark lending rate by
27 base points to 5.85 per cent in a bid to curb credit and investment
growth.

China reported total loans of 20.6 trillion yuan (US$2.575 trillion), up
14.7 per cent over the previous year, at the end of the first quarter.

The central bank recently denied reports that it was considering
increasing down payment to 50 per cent from 20 per cent.

Liu's comments follow a six-point directive issued by the State Council
last week requiring government agencies to rein in what many have called
runaway property price increases in some cities.

An executive meeting of the State Council chaired by Premier Wen Jiabao
vowed to take necessary measures to improve the property market and curb
rapid price rises in major cities.

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Learn Chinese - Xenophobia at heart of product panic in US

Chinese Mandarin - Tibet fiscal income jumps 26.7% in 1st half

? ?

BIZCHINA / Center

Tibet fiscal income jumps 26.7% in 1st half

(Xinhua)
Updated: 2007-07-30 09:43

A general view of the city centre of Lhasa is seen from the top of the
Potala Palace, western China's Tibet Autonomous Region, July 28, 2007.
The fiscal income of Tibet Autonomous Region hit 1.06 billion yuan in the
first six months of 2007, an increase of 26.7 percent year-on-year.
[Reuters]

The fiscal income of Tibet Autonomous Region hit 1.06 billion yuan
(US$133 million) in the first six months of 2007, an increase of 26.7
percent year-on-year, according to sources with the region's statistics
bureau.

An official with the bureau said that investment, consumption and export
trade, the major driving forces for economic development of Tibet, have
kept growing, with consumption being the fastest.

The total retail sales of consumer goods hit 5.19 billion yuan (US$649
million), up 26.6 percent.

More than 8.25 billion yuan (US$103 million) was put in fixed assets
investment in the first half year, up 19.5 percent. The investment went
mainly to rural and pasturing areas and speciality industries.

The region's overall imports and exports reached US$164 million in the
January-June period, up 60.4 percent from the same period of 2006.

(For more biz stories, please visit Industry Updates)

Chinese Mandarin

Chinese School - Renting houses for whole life?

? ?

BIZCHINA / Biz Life

Renting houses for whole life?

By Tu Lei (chinadaily.com.cn)
Updated: 2007-07-27 10:50

Liu Kai, a house buyer in Chengdu City, Southwest China's Sichuan
Province, is regretting his slow decision on buying house, because a one
year wait cost him 120,000 yuan (US$15,852.05).??

Special coverage:
Housing in China
Related readings:
Beijing housing prices up 10.1% in 1st half
?Tax only raises cost of housing
Beijing drafts new rules on low-rent and low-cost housing
Housing, a too heavy burden

In 2006, he planned to buy an apartment at a price of 3,700 yuan per
square meter, but he waited to see if the price would drop. Instead, the
price rose to 5,200 yuan per square meter by the end of 2006.?

"I don't think the housing price will drop, never, ever!" said Liu.?

In Chengdu City,?the average selling price of commodity houses in 2006
was 4,472 yuan per square meter, up 9.5 percent year on year. Between
January and May of 2007, the price was 4,650 yuan, up 6.5 percent year on
year.?

Chen Wuyuan, a researcher from Sichuan branch of the Chinese Academy of
Social Sciences, said the increase of consumer price index (CPI), a gauge
of inflation, is partly attributed to the housing prices.??

"The government should build more low-rental houses for its low-income
residents," said Chen.

Figures from National Bureau of Statistics (NBS) shows that CPI rose 4.4
percent in June compared with a year ago, as a result of rapidly rising
food prices.

Food accounts for 37 percent in CPI, followed by transport and
communications, at 14 percent, and entertainment and education at 12
percent.

As for salaries, the NBS said workers' annual wages rose on average from
12,422 yuan in 2002 to 21,001 yuan in 2006, an annual increase rate of 12
percent.

Figures show the country is experiencing its fastest-ever growth since it
began opening up 30 years ago.

Sichuan Statistics Bureau showed urban residents’ disposable income per
capita was 9,350 yuan one year, up 11.5 percent from last year, with a
growth rate of 2.7 percent from last year.

(For more biz stories, please visit Industry Updates)

?? ?? 1?? 2?? ??

Chinese School

Learn Chinese online - Chinese economists warn of risks of continued yuan appreciation

? ?

BIZCHINA / Center

Chinese economists warn of risks of continued yuan appreciation

(Xinhua)
Updated: 2007-07-25 14:15

The country would face great risks with a strong yuan in the long run if
it failed to improve the quality of its economy to support the currency
by then, Tan warned, urging the government to be alert and take
precautions against the risks.

She was worried the stronger yuan would cut or even wipe off the profits
of China's labor-intensive manufacturing sector, while the foreign
investors would snatch fat profits on the back of low-cost labor in China
and become a dominant factor in the Chinese economy.

Ha Jimin, chief economist with China International Capital Corporation,
argued accelerating yuan appreciation may help ease trade frictions,
lower the pressure from imported inflation, and urge exporting companies
to upgrade its industrial structure.

Professor Ding Zhijie with the University of International Business and
Economics warned the persistent anticipation might lead China to the trap
of attracting more liquidity for its relatively low interest rates.

He noticed that market anticipation of yuan appreciation persisted,
though the currency kept going upward and the exchange rate formation
mechanism became more market-oriented.

Ding said the Chinese government should try not to follow Japan in the
80s, which failed to correct the appreciation anticipation and fell
victim to bubble bursts in the real estate sector and the stock market.

Both Ding and Ha said the pressure of appreciation would continue due to
the country's high growth rate and accumulating forex reserves, and
predicted the value of the Chinese currency would rise to 7.3 yuan to one
US dollar at the end of the year if the dollar maintained its performance.

Ha said it would at least take three years to ease the pressure for
further appreciation of the yuan.

The Chinese government should do more research to identify the real value
of yuan and the equilibrium price of the yuan in order to avoid risks
from the yuan appreciation in a single direction, Tan said.

Fan Gang, a member of the central bank's Monetary Policy Committee,
however, was against deliberately bringing down the anticipation of the
yuan appreciation, and said the yuan's revaluation should keep to the
mechanism of market supply and demand.

(For more biz stories, please visit Industry Updates)

?? ?? 1?? 2?? ??

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Monday, December 24, 2007

Learn Chinese - China Eastern to buy 10 A320s with $612.84m

? ?

BIZCHINA / Center

China Eastern to buy 10 A320s with $612.84m

By Jin Jing (China Daily)
Updated: 2007-07-24 09:38

China Eastern Airlines Corp Ltd, the nation's third-largest carrier,
yesterday announced that it will buy 10 Airbus A320 series aircraft with
a list price of 4.64 billion yuan (US$612.84 million) to meet the
increasing domestic demand.

The airline said in a statement to the Shanghai Stock Exchange that the
actual purchase price was lower than the list price, and that it would
finance the purchase with bank borrowings. The 10 aircraft will be
delivered from March 2011 to May 2012.

Analysts said the aircraft purchase, which will not have any negative
impact on the company's cash flow and management ability, is expected to
enhance China Eastern's network operation competency and help meet
expected increase in market demand.

"China Eastern's fleet expansion is slower than that of the average
market demand," said Ma Ying, an analyst with Haitong Securities.

"The increase of China's air passenger turnover was around 17 to 19
percent in the first half of this year, while China Eastern's aircraft
purchasing is increasing at 10 to 11 percent a year," she said.

"The increase in demand is expected to continue in the long term," said
Guo Dongmou, an analyst with China Merchants Securities.

The purchase is expected to bring a 3.2 percent increase in the company's
Available Tonne Kilometer (ATK) from 2006, according to the company's
statement.

In a separate statement yesterday, China Eastern Airlines said it is
expecting profit in the first half because of foreign exchange gains
brought about by the renminbi appreciation, compared with a net loss of
1.46 billion yuan in the same period last year. The airline had posted a
loss of 2.8 billion yuan in 2006.

(For more biz stories, please visit Industry Updates)

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Chinese Mandarin - China slashes tax on interest income

? ?

BIZCHINA / Center

China slashes tax on interest income

(Xinhua)
Updated: 2007-07-20 19:25

China's State Council announced Friday to reduce the tax on interest
income from 20 to 5 percent as of August 15.

The move is to adapt to changes in China's economic and social situation,
the State Council, or cabinet, said in a statement.

It received authorization to scrap or cut the tax for banking savings
from the Standing Committee of the National People's Congress on June 29.

Experts say the move aims to narrow the gap between deposit rate and
inflation to make bank savings more attractive and to curb the excess
liquidity.

The reduction in interest income tax will increase earnings from bank
savings and is conducive to the economy featured now by rapid increases
in investment and rising inflation, the State Council said in a news
release.

China's gross domestic product grew by 11.5 percent year-on-year in the
first half of 2007, 0.5 percentage point higher from the previous year,
and the fixed assets investment soared 25.9 percent, the National Bureau
of Statistics said on Thursday.

The consumer price index (CPI), the main gauge of inflation, rose 3.2
percent year-on-year in the first half of this year. In June, the CPI
jumped by 4.4 percent from a year earlier, the highest in 32 months and
well above the government's target of 3 percent for 2007.

China began to levy tax on bank savings in November 1999. In the past
eight years, the tax has played a positive role in encouraging
consumption and investment, adjusting personal earnings and increasing
fiscal revenues, said the news release.

(For more biz stories, please visit Industry Updates)

Chinese Mandarin

Learn Chinese online - Wal-Mart aims to double China stores in next 5 years

? ?

BIZCHINA / Overseas Investment

Wal-Mart aims to double China stores in next 5 years

(Bloomberg)
Updated: 2007-07-19 16:14

Wal-Mart Stores Inc, the world's biggest retailer, plans to more than
double its stores in China in the next five years to tap the country's
1.3 billion people.

The expansion will help the Bentonville, Arkansas-based company broaden
its reach beyond its 84 stores across 46 Chinese cities. Wal-Mart expects
to have a 20 percent share of the country's retail market with the
expansion, said Terrence Cullen, Wal-Mart's vice president of China
operations.

"The Chinese market is huge," Cullen said in an interview today in
Singapore. "To date, no real market leader has emerged and our eyes are
on market leadership of some sort. What we'll see is aggressive organic
growth, probably accelerating each year over the next few years."

Wal-Mart is considering buying all or part of Beijing Hualian Hypermarket
Co, the UK's Daily Telegraph reported today, citing unidentified people
close to the talks. Hualian officials couldn't be reached for comment.
Wal-Mart agreed to buy a stake in Chinese retailer Trust-Mart in February.

"The quickest way to do it is to buy into local retailers - - it all
depends on what price they have to pay for it," said Anthony Teoh, a Hong
Kong-based analyst who covers retailers at South China Finance &
Management Co. "When you're looking at the valuations in the retail
sector, foreigners have to pay pretty steep prices at the moment."

Overseas retailers have been expanding in China as the nation opens its
domestic market to foreign competition. Per-capita disposable income in
towns and cities rose 12.1 percent last year and the country's retail
sales increased 14 percent.

"Retail demand is growing," said Paul Tang, chief economist at Bank of
East Asia Ltd. "Retailers are responding to the Chinese government's 11th
five-year plan to boost consumer demand. The overall economy growth is
also quite good, and it all helps to increase consumer confidence."

Wal-Mart faces rising competition as growth in the world's most populous
country draws more retailers. Carrefour SA, Europe's largest retailer,
this month increased its target for new stores in China, where it plans
to open 20 to 25 outlets a year, up from the previous forecast of 20.

China's share of world consumer spending may almost triple to 14.1
percent by 2015, from last year's 5.4 percent, according to Credit
Suisse. That would surpass the share of consumer spending in the U.K.,
Germany and Japan, according to the research. China's 2006 retail sales
grew 14 percent to $770 billion, equivalent to one quarter of the US
market.

(For more biz stories, please visit Industry Updates)

Learn Chinese online

Learn mandarin - Banks predict 1-2 interest rate hikes in 2nd half

? ?

BIZCHINA / Center

Banks predict 1-2 interest rate hikes in 2nd half

By Rong Xiandong (chinadaily.com.cn)
Updated: 2007-07-18 14:42

A number of commercial banks predicted that China may raise the interest
rate once or twice in the second half of this year. The first rate hike
is expected by the end of this month.

Industry experts said they believe the government will likely impose
other measures. For example, it may issue special treasury bonds and
suspend or reduce the interest rate tax, alongside the interest rate rise.

The interest rate might rise once or twice by the end of this year and it
will probably rise by the end of July as capital liquidity was high and
the consumer price index (CPI) might have increased rapidly in June,
China Merchants Bank said in a research report.

The central bank has slowed the pace of withdrawing currency from
circulation so far in a move to leave room for the issuance of treasury
bonds and another interest rate hike, the bank noted in the report.

The Bank of China (BOC) agreed with the predictions made by China
Merchants Bank.

The People's Bank of China needs to increase the interest rate by at
least 18-27 basis points, along with suspension of the interest rate tax,
to bring the actual interest rate on savings into positive territory
because CPI growth may reach 3.3 percent this year. This according to the
central bank's predictions, because CPI could be much higher than the
current interest rate for one-year savings, BOC noted.

BOC also pointed to rapid growth in bank lending and investment in fixed
assets as signs of economic overheating.

Zhang Gang, an analyst from Southwest Securities, said the government
might require financial institutes to raise interest rates for one-year
savings and loans by 0.27 and 0.18 percentage points respectively, as it
did in May.

(For more biz stories, please visit Industry Updates)

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Learn mandarin

Sunday, December 23, 2007

Learn Chinese - Coca-Cola pours more into China

? ?

BIZCHINA / Center

Coca-Cola pours more into China

By Zheng Lifei (China Daily)
Updated: 2007-07-17 10:26

?
A shopper passes a Coca-Cola stand at a Shanghai supermarket. The world's
largest beverage maker yesterday said it would pour $80 million to set up
a new research center and a new headquarters in China. [newsphoto]

Coca-Cola, the world's largest beverage maker, yesterday said it would
pour $80 million to set up a new research center and a new headquarters
in China, one of its fastest-growing markets.

The Global Innovation and Technology Center, Coca-Cola's sixth such
facility worldwide, "underscores our commitment to Asia and China, which
is the future growth engine of our business", said Doug Jackson,
president of Coca-Cola China.

The center, which will be located in Zizu Industrial Park in Shanghai's
suburbs, will mainly develop products for Asian markets, Jackson said.

The center, scheduled to be completed in late 2008, will have over 200
staff members.

"The enhanced research and development and innovation capabilities will
allow us to capitalize on the huge growth opportunities in China," said
Jackson, who assumed the current post in April.

China is Coca-Cola's fourth-largest market in terms of revenue, according
to Jackson. China, he said, is expected to overtake Brazil to become its
third-largest in two years. "And it would outpace Mexico to become the
second-largest within five years."

China is a country with the potential to become its biggest market in "a
couple of years" after it beats Mexico, Jackson said. "It's just a matter
of time."

The beverage giant, he said, will continue to invest and increase
capacities in China to meet the soaring demand. Coca-Cola already has 29
bottling facilities in the country. "We're going to add at least two more
within one year."

The new facilities, Jackson said, will be located in "areas that are not
well represented" at present.

Coca-Cola, he said, plans to spend big on infrastructure in China to
drive up its sales. The "significant investment in infrastructure" will
go to expand the sales force and add more vending machines, Jackson said.

(For more biz stories, please visit Industry Updates)

Learn Chinese

Chinese Mandarin - Creativity solution to a lot of problems

? ?

BIZCHINA / Weekly Roundup

Creativity solution to a lot of problems

By Erik Nilsson (China Daily)
Updated: 2007-07-12 14:35

China isn't known as an epicenter of creative industry, but today, the
"factory of the world" is building an increasingly innovative "workshop
of ideas".

Though creative industry is growing by leaps and bounds globally - faster
than the general world economy - in China, it's bunny-hopping several
steps behind pace. But many experts monitoring the industry believe this
could soon become another tortoise-and-hare story of China's
developmental legacy.

A creativity and design studio in Dashanzi Art District (originally 798
Factory). The studio is the heart of Beijing's increasingly visible art
and culture community. More such facilities are springing up across he
county, reflecting the shifting emphasis on creativity and innovation.
[newsphoto]

"The slogan 'from made-in-China to created-in-China' is a very powerful
one," says Michael Keane, senior research fellow with Brisbane-based
Australian Research Council Centre of Excellence for Creative Industries
and Innovation.

"A 1 percent increase in creative capital is probably worth more than a 5
percent increase in manufacturing productivity, because creativity
entails greater innovation, which ultimately spills over into the general
economy."

The author of the forthcoming book, Created in China: The Great New Leap
Forward, believes China is now moving out of the "mid-stage" of the
"creative ecology" - a phase in which "copycatting" dominates design.

"China is moving from outsourcing for others, from imitation o

f others, to engagement with international and regional partners through
joint ventures, co-productions and franchise agreements," he says. The
turning point began in 2005, when Chinese scholars started discussing the
development of creative industry with international counterparts at a
series of conferences and forums.

A creativity and design studio in Dashanzi Art District (originally 798
Factory). The studio is the heart of Beijing's increasingly visible art
and culture community. More such facilities are springing up across the
country, reflecting the shifting emphasis on creativity and innovation.
Lu Zhongqiu

That led to the second turning point in 2006, when many municipal and
local governments addressed the need for the development of creative
industry while drafting their 11th Five-Year plans, Keane says. At the
same time, manufacturing - especially on the low end of the value chain -
began an inland retreat.

"The big cities are trying to become cleaner and greener. They are hoping
that the high-value design, advertising, tourism and new media industries
will deliver sustainability without pollution. Already, the indications
of change are manifest."

(For more biz stories, please visit Industry Updates)

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Chinese Mandarin

Chinese Online Class - HK party seeks oil futures market

? ?

BIZCHINA / News

HK party seeks oil futures market

By Lillian Liu (China Daily)
Updated: 2007-07-12 07:50

The establishment of a vibrant oil commodities futures market in Hong
Kong will not only help the city strengthen its position as an
international financial center but also assist the mainland fuel its
economic development, said a leading Hong Kong political party.

The stock market in Hong Kong has seen robust growth in recent years,
thanks to the fast-recovering economy. The futures market, however, lags
far behind. A vibrant commodity futures market will provide a powerful
thrust to the territory's economy, said Democratic Alliance for the
Betterment of Hong Kong (DAB).

The party's economic affairs spokesman, Chan Kam-lam, said that after
thorough research, the party has found a commodities market will benefit
the city greatly.

"Particularly in the oil sector, because the fast-growing mainland
economy generates an increasingly high demand for oil," said Chan. "China
relies heavily on oil and consumes large amounts of it but plays a
relatively smaller role in the global oil market."

If a sound oil futures trading system were built up in the city, Hong
Kong would dominate the world market "like New York and London", he said.

DAB has said in a report that Hong Kong will make a perfect complementary
futures trading partner to New York and London given its rich talent
pool, the city's status as a global financial hub, its dynamic banking
system and its experience in risk management .

The party said it has prepared an extensive report on the subject and
will submit it to the central government.

"We have discussed the proposal with officials of the Hong Kong
government, including Financial Secretary Henry Tang, and have received a
very positive response," said Chan.

The party hopes to talk with the mainland authorities and urge the
National Development and Reform Commission to consider the proposal.

In the last three years, the mainland has overtaken Japan to become the
second-largest oil consumer, next only to the US. China's oil demand has
been doubling every 10 years, according to the International Energy
Agency.

(China Daily 07/12/2007 page15)

(For more biz stories, please visit Industry Updates)

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Chinese Online Class

Learn mandarin - Trade surplus hits record

? ?

BIZCHINA / News

Trade surplus hits record

(Shenzhen Daily)
Updated: 2007-07-11 09:31

The country posted a record trade surplus of US$26.9 billion in June as
exporters rushed out shipments ahead of cuts in export tax rebates.

The result, which easily surpassed economists’ expectations of a US$24
billion gap, was much higher than the previous monthly record of US$23.8
billion, set last October.

Economists said the surge was largely due to firms seeking to fill orders
before July 1, when value-added tax rebates on a swathe of products were
either reduced or scrapped.

“The export tax rebate certainly played a part in the record monthly
trade surplus,” said Li Yushi, vice head of a think tank under the
Ministry of Commerce.

Annual export growth in June hit 27.1 percent, while imports grew by 14.2
percent. Economists had expected increases of 28.2 percent and 20
percent, respectively.

Li said the full-year surplus for 2007 was likely to be large but that
the latest monthly figure by itself would not necessarily ratchet up the
government’s disputes with its major trading partners.

But the latest figures support a longer-term trend that could lead to
increased pressure, particularly from Washington, where critics say China
is keeping the yuan undervalued, giving its exporters an unfair advantage
in global markets.

The overall surplus for the first six months came to US$112.5 billion,
the Customs Administration said on its Web site, 83 percent more than in
the same period last year. The rolling 12-month surplus reached US$229.2
billion, up from US$216.6 billion in May.

Hong Liang with Goldman Sachs in Hong Kong estimated that the surplus for
the first half would equal about 8 percent of gross domestic product
during that period, a level she called “unprecedented” for China or
any other major economy.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� China's monthly trade surplus hits new high in June
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� Monthly trade surplus hits new high in June
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