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China Commercial
Brief - April 2, 2004 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.Plan
for Guangzhou Metro Line No. 5 Released
Guangzhou Metro Corporation has recently released the plan for Metro Line No. 5. It will have 28 stops and 12 intersections with 10 other existing or planned metro lines. The east-west bound Metro Line No. 5 is to be 40.5 kilometers long, linking old city downtown in the west with the new commercial center and industrial base spreading out to the east. It will also connect metros from Foshan city in the west and from Dongguan and Shenzhen cities in the east. According to the plan, the construction of Line No. 5 is to start in the second half of 2004. Phase I of the project will cover 31 kilometers and is scheduled to be in operation in 2008. At
present, Guangzhou Metro Corporation is building four other metro lines:
the extension of lines No. 2; Line No. 3; a special section of Line
No. 4 connecting with the University City; and, the experimental line
connecting Guangzhou and Foshan city. Construction is proceeding on
schedule. According to Guangzhou’s short-term plan, by the year 2010,
Guangzhou is projected to have rail lines covering 200 kilometers. 2. China’s Industrial Output Grows in February China’s industrial output grew 23.2 per cent in February, compared with the same period last year, to 370.9 billion yuan (USD 45 billion), latest statistics from National Bureau of Statistics indicate. According to the statistics, for the first two months, the industrial output rose a year-on-year 16.6 per cent to 705.97 billion yuan (USD 85.4 billion). Per
the spokesperson of the National Bureau of Statistics, electronics and
telecommunication equipment, as well as metals, are the main factors
driving the fast growth in industrial output in the last two months. 3. China On-line Stock Exchange Business was 5.27 million users strong in 2003 According to China Securities Regulatory Commission, China’s on-line business reached 3.32 million users, accounting for 10% of the total average Hu-Shen (Shanghai and Shenzhen) stock exchange market in the year 2001. In 2002, the on-line exchange business reached 5.07 million users, accounting for 14% of the total average Hu-Shen stock exchange market in 2002. However, by the end of 2003, the on-line exchange business was 5.27 million users, which accounted for 15.1% of the total average Hu-Shen stock exchange market in 2003. China’s on-line stoke exchange market still has a potential market. It is predicted that if the stock investor can accept the on-line stock exchange method, more investment will be put into this market, and by the end of 2005, China’s on-line stock exchange account will reach 8.8 million users, which will account for 25% of the Hu-Shen stock exchange market. China
On-line Stoke Exchange Account 2001-2005 4. China to promote digital cable TV China
will promote digital cable TV, said a senior Party official recently. (Source : China press and publishing Jounal & CEIS, 30/03/2004 – Translate by Qing Jing) 5. Beijing IT Industry Output Will Reach RMB300 Billion (USD 36 billion) Within the next five years, Beijing plans to gradually grasp the core technology of IT industry, so as to double the total production value of the IT industry in Year 2008 to reach the output size of RMB300 billion (USD 36 billion). The
focus of Beijing Five-Year plan is to increase the development of the
software and integrated circuit industry. In the following five years,
Beijing will promote the development of six new industries, including
digital TV industry, mobile communication industry, IC card and digital
recognition industry, computer and network products industry, transportation
electronic industry and digital camera industry. 6. Three Hundred and Thirty Two Foreign Talent Agencies Approved to Operate in China According to information released from the 2004 China International Talent Exchange Conference held in Nanjing, the conference accredited more foreign talent agencies and local Chinese units to carry out international talent exchange. This is a significant milestone whereby the Chinese government will standardize its international talent market according to international practice. So
far, China’s State Administration of Foreign Experts Affairs (SAFEA)
has accredited 332 foreign talent agencies to operate in China, including
96 foreign experts organizations and 236 foreign talent-training agencies.
In addition, it has accredited 390 local Chinese units to employ qualified
foreign educational experts. The SAFEA has also formulated an annual
inspection system and withdrawal system. China Commercial
Brief - March 19, 2004 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.
Complete opening-up of retail industry to foreign investors
The Deputy Minister of MOFCOM Mr. Zhang Zhigang said recently that in line with its commitments to the WTO, China will further reinforce its opening-up of the retailing sector. By December 11, 2004, restrictions on geographic location, equity participation, and the number on foreign invested retail enterprises will be removed. By now, most of the multinational retail giants have entered China. In 2003, the annual revenue of Carrefour reached RMB 13.4 billion (USD 1.62 billion), an increase of 25.7 percent over the previous year. Wal-mart has opened 33 branch stores in China, and its annual sales reached RMB 5.85 billion (USD 708 million) in 2003. Experts indicated that foreign investment in the retailing sector is still very low in China. Foreign invested retailing is mostly concentrated in the eastern part of China, and is mostly in the form of hyper-markets. As the opening-up gradually takes place, there will be more types of retailing and more companies in the center and western part of China. Mr.
Zhang also pointed out that currently the logistics industry in China
is still relatively weak. The opening-up of the retail industry will
impact the logistics industry, and bring new opportunities to it.
China will continue to face power shortage as the economy keeps on the fast track. Chai Songyue, chairman of the State Electricity Regulatory Commission (SERC), predicted in a national work meeting on securing power production that China would have a shortfall of more than 20 million kilowatts in electricity supply in 2004. He said in some areas of the country, the power shortage would be even worse than last year. 22 provinces, autonomous regions and municipalities had to implement blackouts to limit electricity consumption in 2003 as China's economy developed at a speed of 9.1 percent. In the first two months of the year, a significant number of areas in the country have already been forced to cut power supply at peak times. Chai said electricity shortage would be acute in east and south China. Certain parts of north, northwest and central China would also suffer inadequate power supply. The problem would be most prominent in Jiangsu and Zhejiang provinces and Shanghai City in east China this year. In order to guarantee more power supply, China will accelerate construction of new electricity generating plants and power grids. At the same time, the SERC and government will jointly develop incentive measures encouraging balanced electricity consumption. According
to the forecast of the China Electricity Council (CEC), China's power
generation capacity will grow 9 percent in 2004, while the consumption
of electricity will increase by 12 percent. The association predicts
that in 2005, the electricity shortage will be eased to certain extent.
As China's market for new cars expands and more and more families are able to afford an entry-level vehicle, the demand for auto bulbs has kept pace. Currently, China has 35 auto bulb manufacturers, which produced about 751 million bulbs in 2002, out of which 12 large auto manufacturers produced 628 million auto bulbs. Most of Chinese auto bulb manufactures are located in Guangdong, Zhejiang and Jiangsu provinces. The private-owned companies accounts for 67% of the total auto bulb manufactures, and the rest of 33% are state owned and joint ventures. The following chart shows the output and type of the auto bulbs manufactured in 2002. China now has 18 million registered motor vehicles. The number is estimated to reach 25 million by 2005, and 50 million by 2010. The demand for auto bulbs is expected to reach 1 billion by 2005 and further up to 2 billion by 2010. The output of auto bulbs is 750 million in 2002, which shows that there will be a supply shortage of 250 million by 2005. As China’s auto bulbs manufacturers focus on the development of halogen tungsten and gold halogen tubes, they will need the latest technology and production equipment. China must still import a number of key technologies and equipment to manufacture gold halogen tubes, and this is a good niche for American suppliers of halogen and gold halogen tubes production equipment and services. . Among
the technologies of most interest to China’s auto bulb manufacturers
are xenon tube and light emitting diode (LED) tube. In addition, China
is seeking high performance and long lasting lighting technologies.
U.S. companies, offering equipment and services in these auto lighting
market niches should find a ready market in China.
The groundbreaking ceremony for new U.S. Embassy in Beijing was held on Feb. 11, 2004, and marked the official start of the construction of the largest U.S. State Department overseas facility. The cost of the new embassy is USD 275 million. The architectural firm Skidmore, Owings & Merrill designed the facility and joint venture partners Zachary-Caddell will build it. Beijing Construction Engineering Group is the Chinese contractor performing site preparation and excavation. The new U.S. Embassy will have more than 50,000 square meters of floor space and is scheduled for completion in early 2008, just before Beijing hosts the Summer Olympics. Contact for American Companies: Mr. Plaban K (PK) Bagchi is the Project Director for the New U.S. Embassy Complex Project, and he will be responsible for all the construction operations in Beijing. American companies interested in becoming suppliers for the new U.S. Embassy in Beijing should contact Mr. Bagchi at Attention:
Mr. Plaban K Bagchi
As the number of DSL users hit 10.95 million in the end of 2003, China became the world's largest DSL market, according to a DSL Forum statement. The DSL Forum is an international industrial consortium of over 200 service providers, equipment makers and other interested parties, with a focus on developing the full potential of broadband DSL. Japan, formally in the number one position, is now in second place with 10.27 million, while the United States is in third place with 9.12 million and South Korea in fourth at 6.43 million. As more and more Chinese have increased their interest in using the Internet, industry analysts predict that there will be a strong trend of further growth in China’s DSL market in 2004. A report in Ren Min You Dian Bao, the official newspaper of China’s Ministry of Information Industry (MII), indicated that China Telecom and China Netcom purchased 13 million lines of DSL equipment in 2003. The two telecom carriers are expected to purchase 20 million lines in 2004. Even if the cost of DSL has gone down to RMB 300 Yuan, about USD 40 per line, the investment in DSL equipment by the two telecom carries will reach RMB 6 billion yuan, about USD 750 million, in 2004. With
large fixed-line networks in operation, DSL has become a sharp weapon
for both China Telecom and China Netcom to squeeze out smaller broadband
service providers like Great Wall Broadband and Bluewave, which uses
Ethernet technology. China Telecom and China Netcom provide free DSL
modems to users. They expect to attract more subscribers and increase
their revenue from the usage of internet. Limited recourses of content
and applications are the two barriers that the telecom carriers have
to overcome. As China Telecom and Netcom are eager to generate revenues
from broadband services, they might be willing to share some of their
revenues with ICPs and SPs. 6. The First Group of Hotels Signed the Olympic Lodging Agreement with BOCOG Beijing 's hospitality industry is getting prepared to serve the spectators of the Beijing Olympic Games. The first seven five-star hotels signed the Olympic lodging agreement with BOCOG on March 18, 2004. These seven hotels are: Beijing Hotel, China World Hotel, Grand Hotel Beijing, Hong Kong Macao Center Swissotel, Beijing International Hotel, Kunlun Hotel and Crowne Plaza Park view Wuzhou Beijing. The seven hotels will provide accommodations to accredited people from the Olympic Family, the sponsors and the media. At the time of the Games, the seven hotels are to keep the total of 3,500 rooms available to BOCOG while they accommodate other guests. In
line with the Olympic Charter and the Host City Contract, BOCOG will
have to provide 22,000 hotel rooms for accredited people during the
Games period. To meet this goal, BOCOG will sign the same agreement
with some 70 more Beijing star-rated hotels within this year to ensure
that a total of 23,000 hotels rooms will be available during the Olympic
Games in 2008. China Commercial
Brief - March 5, 2004 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.
Dalian Become Foreign Software Research and Development Center in the
Northeast China
Recent news reports indicate that Dalian’s efforts to become the foreign software research and development center in the Northeast appears to have achieved measured success. American exporters of application specific software should take note of these developments when contemplating effective approaches to market entry in China: a) consider whether it is necessary to localize the software, and b) plan ahead for the possibility of software research and development in China. Foreign software companies are anxiously waiting for the release by the Ministry of Information Industry of new regulations on Chinese government software procurement. While Vice Minister Gou Zhongwen has attempted to assuage foreign concerns about fair and competitive procurement practices, he may have tipped his hand when he recently stated that "software firms invested by foreign companies will enjoy equal opportunities from government procurement." Although no one knows whether foreign direct exporters will be excluded from these business opportunities, it is likely that the government procurement implementing regulations will define "domestic" companies by a certain level of investment in China. It is also important to note that the draft regulations suggest that Chinese government entities will be required to procure domestic software where commercially available. It is still unclear as to when the implementing regulations will be issued. Nevertheless, U.S. companies with products that compete against commercially available Chinese products may need to re-evaluate their China strategies if selling to the government According to a Dalian municipal government official, the Dalian Software Park offers a hospitable environment to localize software (system integration / programming, language adaptation), thereby making the product more marketable to Chinese buyers. Other foreign companies that entered the China market over ten years ago are beyond the software localization stage and have established software research and development centers. These companies include Microsoft, Matsushita Electronic Industrial Co., and Hewlett Packard. For more information about the Dalian Software Park and IT opportunities in the Northeast Region, contact Ms. Liu Yang at yang.liu@mail.doc.gov. (Sources: Interview with Dalian Bureau of Commerce,2/20/04 - Edited by CS Shenyang)
In 2003, the profitability of China’s petroleum and chemical industry improved significantly, though several factors threatened the development of the sector, including insufficient supply, coal and electricity price rises, and transportation problems. The main economic indicators reached record highs thanks to oil price increases, strong domestic demand and strict anti-dumping policies. Total industrial output value of the petroleum and chemical industry was RMB1,202.870 million (USD 145.538 million) , which is an increase of 18.7 percent year-on-year. Revenue rose 26.4 percent to RMB1, 800 billion( USD 218 billion). Total profits in the industry reached RMB 176.4 billion(USD 21.34 billion), an increase of 43.6 percent over figures for the previous year. The top five growth regions for industry are Helongjiang, Shandong, Xinjiang, Guangdong and Jiangsu Provinces respectively and regions with much higher increase of revenue over figures for the previous year are Hubei, Jilin Provinces and Beijing, the increase of which are 172.6%, 172.5%, and 130.2% respectively. In view of sub-industries, the top three with the increase of revenue in petroleum and chemical industry are oil and gas exploration with 70.5% of the total industry revenue, chemical with 23.9% and crude oil processing with 5.2%. China’s imports and exports of petroleum and chemical products topped US$100 billion for the first time, totaling US$ 113.35 billion, a 33 percent year-on-year jump. As for import trade, the increase of crude oil import, which takes up 24.3% import volume, will continue. In 2003, the crude oil imports reached 91,126,000 tons and import trade volumeUS$19,820 million, an increase of 31.3% and 55.4% over the previous year. Among import trade volumes, organic materials reached US$16.08 million, which was 19.7% of the total volumes and an increase of 46.1% over the figures for the previous year; synthetic resin reached US$15.92 million, an increase of 14.5%. The industry is expected to continue to develop rapidly in 2004, with a total estimated rise in industrial output value from 15 to 20 percent. It is estimated that Chinese GDP in 2004 will keep with the pace 7%-8.5% increase in major industries such as auto manufacturing, telecom, IT, construction industries, etc. Moreover, absorbing foreign investment into the industry will be a benefit for the domestic production. Generally speaking, prospects good factors for the development of the petroleum and chemical industry. According to CPCIA (China Petroleum and Chemical Industry Association), in 2004, the production in this industry will be as follows: crude oil 172 million tons, natural gas 35 billion cubic meters, ethylene 7 million tons, synthetic resin 17.5 million tons, synthetic rubber 1.35 million tons, synthetic fiber 12.5 million tons, fertilizer 40 million tons (nitrogen fertilizer 29 million tons, phosphate fertilizer 9.5 million tons), soda over 12 million tons (an increase of 1 million tons over 2003), caustic soda over 10 million tons, and tires over 200 million. (Source: China Chemical News Vol 8. 2004 - Translated by Wang Ling)
Mr. Zhao Xizheng, General Manager of State Grid Corporation, pointed out: the target this year is to develop a grid plan incorporating national, regional and provincial grids to meet the power demand of 1,222 billion KWH (Kilowatt Hours). According to latest statistics, State Grid Corporation’s power sales in 2003 reached 1,120 billion KWH, among which 38.8 billion KWH was from cross-region supply. The sales revenue was 427.7 billion RMB, equivalent to 51.97 billion USD and profit reached 4.16 billion RMB, equivalent to 505 million USD. By the end of 2003, its total assets reached 857.6 billion RMB, equivalent to 104 billion USD. State Grid will invest in the Northeast -North China grid connection project; the second phase of North China- Shandong Grid project; and the Wan County- Longquan-Jinmen Power Transmission project. Many projects over 330 KV will be completed and put into use as well, i.e. Bazhou in North China; Northeast, including Dongxu; Jiangsu in East China; Hubei and Henan in central China; Guanzhong in West China-North of Shaanxi. Some projects are still in the implementation stage, i.e. The Three Gorges-North China direct current transmission project, The North West-North China direct current transmission line connection project, The Middle China-North China transmission line connection project, and The Chuanyu-Northwest transmission line connection project. Meanwhile, Beijing, Shanghai and three other cities will start power distribution network construction and other reconstruction pilot projects. It is anticipated that the State Grid Corporation will transmit over 30 million megawatts of electricity by 2010, with power capacity over 120 billion KWH. (Source : China Business Times 02/16/2004 - Translated by Wan Xiaolei) 4. Six Sectors Face Technical Barrier In Export China has frequently come across technical barriers in exports. More and more countries have imposed technical barriers, on China’s exports in a bid to protect their domestic industries. According to the latest survey provided by the Ministry of Commerce, six sectors, namely agricultural products, light industry, electro-mechanic products, textiles and garments, hardware and chemicals, and medical and health care products, have encountered technical barrier restrictions from other countries. Agricultural products have suffered the biggest losses (US$9.5 billion), followed by light industrial products, (US$4.1 billion); electro-mechanic products, (US$1.7 billion); textiles and garments, (US$1.0 billion); hardware and chemicals, (US$700 million), and medical and health care products, (US$300 million). (Source: Would Manufacturing Engineering & Market,01/2004 – Translated by Zhao Peining) 5. China to spend 15 Billion RMB on Hazardous Waste Disposal According to the information released from the State Environmental Protection Administration, P.R.C. (SEPA) on January 19, 2004, the State Council formally approved the Plan to Construct Facilities to Dispose Hazardous Waste and Medical Waste Nationwide. In order to control the environmental pollution from hazardous waste, medical waste and radioative waste, China is going to spend 14.92 billion RMB (USD 1.8 billion) in the coming three years to safely store and dispose of hazardous waste in China by and large. Based on this Plan, China is going to take measures to completely improve the current status of hazardous waste treatment, such as: To construct 31 hazardous waste treatment centers with the total disposal capability of 2.82 million tons per year. The newly reconstructed and expanded facilities will provide a capability of 3.5 million tons per year to treat the hazardous waste generated in the current year and process accumulated storage. To build 300 facilities to dispose of medical waste to meet the requirement of health improvement in China’s urban areas. To reconstruct, expand and build 31 new warehouses for radioactive waste at the provincial level, with an increase in storage room of 15,300 cubic meters. To set up 31 hazardous waste registration centers at the provincial level. The Plan also elaborates on technical requirements on transport vehicles, construction standards, incinerators, tail exhaust treatments, safe landfill, and system setup. (Source: China Business Times, 02/05/2004 - Translated by Cao Yue) 6. E-sports Games Officially Launched in China The All China Sports Federation (ACSF) and The China Olympic Committee (COC) announced on November 28, 2003 that e-sport games were officially identified as the 99th sports game in the country under the auspices of the General Administration of Sports of China. According to the official definition, an e-sport game is a sports game of human intelligence competition undertaken with high-tech software and hardware as competition devices. This represents the birth of a new sports game and perhaps a new industry. The official endorsement of e-sports games is expected to put an emphasis on the development of a host of high-tech industries, including software, gaming, telecommunications, broadband, Internet as well as computer hardware. Other industries such as entertainment and media are also expected to benefit from these new sports games. The 2004 China E-sports Game (CEG), sponsored by the General Administration of China and All China Sports Federation will be launched this month. CEG's official web site is: http://www.ceg.net.cn. Prior to official endorsement, several important international e-sport events had already been introduced into China, but their influence has thus far been limited. Such events included World Cyber Game (WCG) from South Korea, Electronic Sports World Cup (ESWC) from France and Cyberathlete Professional League (CPL) from the US. (Source: China Internet Weekly Feb 23, 2004, No. 4 Page 22-30, CEG web site - Translated by Xi Xianmin) China Commercial
Brief - February 20, 2004 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.
USD 8.7 Billion Will Be Poured Into More Power Stations 1. USD 8.7 Billion Will Be Poured Into More Power Stations As a result of the rapid development of the local economy and the increase in electricity usage by industry and private consumers, Sichuan Province is facing a serious electricity power shortage. The Sichuan Provincial Government has announced that it will fund RMB 72 billion (USD 8.7 billion) for the construction of a series of large-scale power stations in 2004 and 2005. Four jumbo-size hydropower stations will be built on the Daduhe, Yalongjiang and Jinshajiang rivers. The rivers’ exploitable waterpower accounts for 80% of the province’s total. The four hydropower stations will be able to generate power even during low water flow periods since they will have a specially designed reservoir which will maximize the amount of water that is available at all times. A group of large and mid-sized hydropower stations, including the Zipingpu hydropower station and those located on the Huoxihe, upstream Minjiang and Mabian rivers, will be constructed in Chengdu, Deyang, Mianyang, Leshan and Neijiang cities. Ten thermal power stations will be built in Yibin, Luzhou, Guangan and Dazhou, which are the four major coal producers in Sichuan Province and account for 80% of the coal resources in the Province. By the end of 2005, Sichuan Province will have an electric power supply of 32.6 million kilowatts. (Sources: Chengdu Weekly, 01/11/2004, Edited by CS Chengdu) 2. Retailers See Big Sales Rise During Spring Festival According to statistics from the China Commercial Information Center, China’s 100 key retailers realized combined sales of RMB 2.1 billion (USD 254 million) during the recently concluded week-long Spring Festival holiday. Retail sales at 114 Beijing retailers added up to over RMB 1 billion (USD 126 million), a rise of 8 per cent during the holidays. More than 3,000 retail outlets in Shanghai sold goods worth RMB 2.43 billion (USD 294 million), a 10.4 per cent increase. Retail sales in Xian in China’s western region grew by 14 per cent in that period, and those in Wuhan in central China rose 12.2 per cent. Retailers
are enjoying the Lunar New Year as local residents spent more than ever
this Spring Festival while dining out, as well as purchasing high-end
electrical appliances and jewelry. 3. First Sino-Foreign Housing Savings Bank Opens On February 15, 2004, the first Sino-foreign housing savings bank, Sino-German Housing Savings Bank, held an opening ceremony in Tianjin, which marks the operation of the first-ever housing savings bank in China based on international standards. In the meantime, its repayment interest rate of 3.3 percent, provided a public rate that for the first time varied from the ‘fixed’ rate for housing loans in China. The Sino-German Housing Savings Bank was jointly established by the China Construction Bank (CCB) and the German Bausparkasse Schwaebishe Hall. Its registered capital is RMB 150 million (approximately USD 18 million), with the CCB owning 75.1 percent of the stake and the Bausparkasse Schwaebische Hall owing 24.9 percent. The
housing savings bank itself is a product that combines savings and loans.
After the clients sign the housing savings contract with the housing
savings bank, and make their initial deposit with the housing savings
bank, the client can reap an interest income and government bonuses
from their deposits. Further, the housing savings bank clients are entitled
to obtain home loans with an annual rate of 3.3 percent, far below that
of other regular home loans, currently at 5.04 The
appearance of the Sino-foreign housing savings bank will create a new
channel of money collection for common house buyers and enrich China’s
housing financing system. 4. High Tech and Precise Bearing Imports Soaring in China In the first three quarters of 2003, China imported USD 645 million worth of bearings, with trade deficit of USD 30 million. Though the report for the whole year has not been released yet, industrial experts estimate that the ratio between bearing imports and exports in China in 2003 reached 1.05:1, breaking the record with imports exceeding exports held since 1986. Based on the data in the past years, bearing imports in China show strong impetus: Year
Ratio (import: export) Industrial experts mainly attribute the speedy increase of bearing imports to the positive development of the principal machinery. In 2002 the industry volume shot up 18.9% nationwide, with machinery rising 23.39%. The eight principal machinery production reached a record-high development, including 3.477 million vehicles with 38.45% higher than 2001; 284 million kilowatts of internal combustion engines with 38.33% increase; 232,000 units of metal cutting machine tools with 19.15% increase. The accessory bearings to the principal machinery are in short domestic supply and therefore have lead to a sharp increase in bearing imports. China
has production capability of 20,000 bearings each year, lagging behind
the international level. China imports large quantity of bearings with
special industry purpose, high precision, high tech content, and high
added-value. 5. 2003 China Informatization Survey Report Released CCID (China Center for Information Industry Development Research) recently released "2003 Survey Report on China's Informatization Condition". The survey, started in September last year covered over 10,000 enterprises, institutions and government agencies. The
Report indicates that the government plays a leading role in the informatization
drive. 97.6% of government agencies surveyed have introduced e-government
applications. 30% of the surveyed institutions have started developing
long-term plans for informatization. "Virtual enterprise"
technology tops the list of best prospect application technologies according
to the opinions of respondents to the survey. Other technologies on
the list include: "networking and large capacity storage",
"collaborative commerce", and "mobile computing". 6. Latest figures of Chinese Students Overseas China has 700,200 students who have studied or are currently studying at overseas educational institutions from 1978 to 2003, according to the latest status from China's Ministry of Education. Only 172,800 of those students have returned to China. The number of Chinese overseas students has increased rapidly over this period of time. In 1998, China sent 17,000 student overseas to study. By the end of 2002, the number had reached 125,000. The number of self-sponsored students increased 11 times in the past 5 years, from 11,000 in 1998 to 117,000 in 2002. In
2003, 117,300 Chinese went to study overseas. Among them, 3,002 are
Chinese Government sponsored, 5,144 are work unit sponsored, and 109,200
are self-sponsored. In 2003, 20,100 Chinese students returned from overseas.
Among them, 2,638 are Chinese Government sponsored, 4,292 are work unit
sponsored, and 13,200 are self sponsored.
China
Commercial Brief - February, 6 2004
Guangzhou has planned to invest $84.7 million (about RMB 7 billion) to build six new sewage treatment plants in the next three years. The plan is part of the efforts to achieve the goal of treating 100% of domestic sewage by the end of 2006. The six new wastewater treatment plants are expected to treat nearly one million tons of wastewater per day. Currently four sewage treatment systems are being built in Guangzhou and are scheduled to be in operation by the end of 2004. By then, Guangzhou will be able to treat 1.42 million tons of wastewater a day, or 70% of the total daily discharged wastewater. The six additional plants are expected to treat the remaining 30% wastewater. The
six new sewage treatment plants are the expansion of Lijiao Sewage Treatment
Plant, Phase I of Shijin Sewage Treatment Plant, Longgui Sewage Treatment
Plant, Jiufo Sewage Treatment Plant, Phase III of Liede Sewage Treatment
Plant, and Phase I of Dashadi Sewage Treatment Plant. 2. Auto Financing Firms Entered Chinese Market According
to industry analysts, auto sales in China will exceed three million
units by 2005. Coupled with strong growth in commercial vehicle sales,
this will also drive strong demand for auto financing. The explosion
in demand for family sedan vehicles in China shows no signs of abating.
In just the last three years, sedans have risen from 30 percent of the
motor vehicle market in The China Banking Regulatory Commission (CBRC) approved applications from Volkswagen Auto Group, Toyota Motor Corporation and General Motors Acceptance Corporation to provide auto financing in December 2003. These three companies will be the first non-bank institutions to provide auto financing in China. Volkswagen Auto Group, Toyota Motor Corp will establish their own auto financing subsidiaries in Beijing, and General Motors Acceptance Corporation will form a joint venture with the Shanghai Automotive Industry Corporation (SAIC). The three groups are scheduled to complete preparation works within the first half of 2004. China
has become one of the world’s fast growing automotive market. The total
output of motor vehicles in China exceeded 4.3 million this year. Since
2001, China’s quota for components and completed vehicles has increased
15 percent to USD9 million in 2003. China imported 180,000 complete
cars in 2003, an Chinese commercial banks started to provide auto loans in 1998. However, still less than 20 percent of cars in China are sold by loans in 2003, while more than 70 percent in developed countries are sold by loans. China published the regulations on auto financing in October 2003 to fulfill the nation’s World Trade Organization commitments. Volkswagen, Toyota and General Motor filed applications for auto financing in early December. The approval process has been much faster than industrial estimation. Domestic
auto companies are also preparing to establish auto financing businesses,
but none have obtained permission so far. Chinese regulations require
that auto financing companies should have at least an asset of RMB 4
billion (USD 483 million), which would be too high for most local companies.
The auto financing companies are also required to have a ten percent
capital adequacy ratio, which is higher than the eight percent of commercial
banks. 3. China Starts Trial Operation of its First Regional Electricity Market In a groundbreaking move to liberalize the electricity generation market and introduce market mechanism into it, China put into trial operation the first regional power market in its northeastern provinces on January 15, 2004. The Northeast China Regional Electricity Market covers an area of 1.2 million square kilometers, involving 100 million residents. More than 20 power generation companies will compete with each other to supply electricity to local grids there. All the power trade will be conducted in an electricity-trading center in Shenyang, capital city of Liaoning Province. Payments will be made through local settlement centers in Liaoning, Jilin and Heilongjiang provinces. As the first step, the Northeast China Regional Electricity Market will begin with power trade on monthly basis. In consequence, the market will gradually adopt other forms of trade, including real time trade and trade of electricity generation rights. As the market matures and the pricing system perfects, the regional electricity market will be fully open to market competition. SERC
Chairman Chai Songyue said the establishment of the Northeast China
Regional Electricity Market marked a concrete step forward in China's
power reform, and the establishment of competitive and open regional
electricity markets will help meet the economy's growing demand for
power. The ultimate goal is to set up six regional electricity markets
in the next two to three years in China.
China's State-owned Assets Supervision and Administration Commission (SASAC) announced that as of January 20, 2004, China Railcom officially became a wholly state-owned enterprise under its supervision. This change indicates that China Railcom is separated from the Ministry of Railways (MOR) and will operate independently as one of the six basic telecom carriers. The SASAC also oversees China's five other telecom operators, China Mobile, China Unicom, China Telecom, China Netcom, and China Satcom. •Background China Railcom was established on December 20, 2000 out of the Telecommunications Division of the MOR. The company has a registered capital of RMB10.3 billion, about US$1.25 billion, 51% of which was owned by MOR and 49% by another 15 investors. China Railcom is licensed to provide all telecom services except mobile communications. By the end of 2003, the total assets of the company stood at RMB 35 billion, about US$ 4.23 billion. China Railcom has 150,000 kilometers of transmission lines, which includes 100,000 kilometers of optical fiber cables, and a total switching capacity of 18 million lines. It has 31 provincial branch companies and operates in 316 Chinese cities. At present, China Railcom has 70,000 staff. The Chinese government created China Railcom with an attempt to break the monopoly by China Telecom in the fixed line telecom service sector. However, because of the lack of investment to upgrade its networks in order to provide services to the general public, internal disputes on whether the company should remain under the control of MOR or operate independently, and lack of expertise, China Railcom remains the smallest telecom operator in China though it recorded US$ 845 million in revenues. According to statistics released by the Ministry of Information Industry (MII), China Railcom, together with China Satcom, held only 1.6% market share in 2003 while China Mobile held 37%, China Mobile held 30.7%, China Netcom held16.2% and China Unicom held 14.5%. •The Next Step After becoming an independent telecom operator, China Railcom will focus its efforts on the following aspects in 2004: Structural Change – With limited influence from MOR after becoming an independent telecom operator, China Railcom will be able to carry out the restructure of the company in a way to operate effectively so as to compete against China Telecom and China Netcom. This structural change may take 6-8 months. Development Strategy – China Railcom has not challenged China Telecom and Netcom in the fixed line telecom service sector in the past three years due to the lack of a clear-cut market strategy, in addition to its weakness in infrastructure, e.g., unavailability of an access network. After becoming an independent operator, China Railcom will develop a strategy to differentiate itself from its competitors. It will well maintain the private network along the rail lines and provide better services to MOR; upgrade and expand its existing networks; tap opportunities in niche markets in less developed areas such as western provinces, rural areas and suburbs of large and medium-sized cities; lease access networks from cable television operators or build its own access network by using wireless technologies. China Railcom expects to become a competitive player in three to five years’ time. 3G License – China Railcom has been lobbying for a 3G mobile communications service license for the past three years without success. Putting it under the supervision of SASAC increases the possibility for China Railcom to obtain a 3G license. In fact, it is allowed to conduct technical trials of 3G systems in Beijing, Shanghai and Chengdu. By now, all six carriers are conducting 3G trials. There comes a very interesting question of how many 3G licenses the Chinese government will issue, four or six? As all the carriers are lobbying hard, the Chinese government may further delay the issuance of 3G licenses. •Where Is the Money? Money will be the biggest challenge for China Railcom after becoming an independent carrier. Lack of capital investment has been one of the key reasons for the slow growth of China Railcom in the past three years. Most of its investments were from itself including MOR (RMB 3 billion, about US$400 million from operating the private network along the rail lines) and the State Investment Bank. It tried to raise money from the capital market but failed. The Chinese government arranged MOR to take over China Railcom’s debt of RMB 2.4 billion, about US$ 300 million after the de-link of the two in an attempt to create a better operating environment for China Railcom. It seems that lack of capital investment will continue to be the bottleneck for the growth of China Railcom. For the long run, it will pursue an IPO to raise fund from the stock market. However, it may take 3 to 5 years to do so. •Good News for Vendors Putting
China Railcom under SASAC is a piece of good news to telecom equipment
vendors. When China Railcom tries to upgrade and expand its networks
and improve its services, it will buy more equipment and services. 5. High Demand for Steel for the Heavy-Duty Machinery Industry The development of the heavy-duty machinery industry in China brought on high demand for steel. The heavy-duty machinery industry is one of the major end users of steel. Every year, China imports 4,000 to 6,000 excavators. However, locally made excavators’ share of the market is decreasing due to a lack of certain types of steel and poor quality steel that can not meet manufacturing requirement. It is estimated that in 2005, China’s mining machinery industry will consume 2.6 million tons of steel for steel structures. Moreover, China’s heavy-duty machinery industry will consume more than 3 million tons of steel including steel sheet, steel plate, section materials, high-quality section materials, all types of cold-bend section steel and profiled steel bar. China
is also in high demand for importing special steel bar, as it is hard
to find similar products in China and locally made products’ quality
is poor.
China
Commercial Brief - January 09, 2004 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.
Shanghai Spurs Expressway Construction 1. Shanghai Spurs Expressway Construction The city of Shanghai is now stepping up the construction of expressways and highways. Currently, there are 400 kilometers of expressways under construction, and the city is planning to build and improve an additional 710.36 kilometers of highways in the countryside. The Municipal Road Administration Bureau said yesterday that a new master plan for an expressway grid linking Shanghai and the nearby cities had been completed. According to the plan, the number of expressways between Shanghai and the adjacent two provinces Jiangsu and Zhejiang will be increased to 10 expressways with 60 lanes. The original plan was to build 6 expressways with 34 lanes. By the end of last year, the total number of kilometers covered by Shanghai's highways had reached 6,485.61 kilometers, including 240.23 kilometers of expressways. Last year, the traffic needs of the Yangtze River Delta Urban Ring was researched, and a basic layout of inter-city road traffic has been devised. The layout shows that two new expressways will be built between Shanghai and Jiangsu Province, bringing the total number to six expressways. Another two new expressways will be built between Shanghai and Zhejiang Province, bringing the total to four. In the future, the number of national highways to Jiangsu and Zhejiang will increase to 10. There will also be 15 other new roads connecting Shanghai and other Yangtze River Delta cities. (Source: Jiefang Daily, 01/06/2004 - Translated by FCS Shanghai)
There is a small gap between China’s bio-medical industry and other conuntry's since this industry started almost at the same time through out the world. China has a strong team that has received overseas modern life science training and engaged in overseas higher education studies. Since the open door policy was adopted, almost 60% of the 320,000 students who studied abroad majored in the life sciences. After China’s entry into WTO, global corporations have established their R&D bases in China. China Central Government has also issued a series of policies to support the bio-medical industry and the local Chinese Governments have set bio-medical development as one of their pillar industries. Further, China’s implementation of the compulsory certification system supports further Chinese bio-medical development. China’s bio-medical industry is migrating from generic products into bio-medical R&D. Currently, China is able to manufacture thirteen of the Category 18 biomedicines. Among the top 10 bio-medical products worldwide, 8 varieties originate from China. There are 150 bio-medical projects in which China has invested clinical trial studies; among which 10 varieties of products are expected to be new China’s class one drugs. China’s bio-medical industry sales were RMB 1.8 billion (USD 220 million) in 1996, RMB 7.2 billion (USD 880 million) in 2000 and the sales are expected to reach RMB 15 billion (USD 1.83 billion) in 2005. However, problems still exist in China’s bio-medical industry: the shortage of funds, brilliant personnel, low rate of transformation of R&D achievements, lack of bio-medical system platform construction, as well as the legal construction lagging behind the bio-medical industry. (Source: China medical Newspaper, 12/23/2003 - Translated by Sun Shuyu)
The Ministry of Commerce announced the fertilizer import tariff and quota in accordance with China’s commitment of access to the WTO. The
fertilizer import tariff and quota in 2004 is as follows: (Source : China Business Times, 01/02/2004 - Translated by Wan Xiaolei)
According to the Economic Operation Department of Ministry Information Industry, China's information industry has maintained steady growth in the first eleven months of 2003. The computer industry led the way with a growth rate of 65.9%. Telecommunication manufacturing sector had a growth rate of 19.9% and the electronic components sector showed a growth rate of 25.8%. China's information industry products experienced USD243.33 billion in imports and exports in the first eleven months of 2003. Exports totaled USD125.4 billion, an increase of 52% compared with the same period of 2002. Imports totaled USD117.9 billion, which was an 54.2% increase compared with the same period of 2002. The resulting trade surplus of USD7.47 billion is a 23.7% increase over the same time period in 2002. (Sources: China Information World 01/05/2004- Translated by Cao Shujuan) 5. China Intelligence Building Professionalism Committee founded Approved by the Ministry of Construction and the Ministry of Civil Affairs, the China Building Professionalism Committee was founded in December 21, 2003. Along with the rapid development of the Hi-tech and energy saving technology, intelligent buildings are the trend of the world building construction industry. The main responsibilities of the China Intelligence Building Professionalism Committee include: (1)
To be involved in the government decision-making on building industry’s
development, reform; (Source: China Real Estate News, 12/24/03, Translated by Xie Pingping)
In the first three-quarters of 2003, exports of high-tech products sharply increased in Shenyang. Exports of computers and communications products' totalled USD505 million, up 81.5%, from the same period as last year, accounting for 90% of the total high-tech exports showed the strong competitive power of Shenyang's IT industry. (Source:
China Industry News, 12/22/2003 -Translated by Zhao Peining)
China
Commercial Brief - December 26, 2003 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing.
1. "Rejuvenate the Northeast", Views From Jilin Province On August 4, Premier Wen Jiabao convened a meeting in Changchun, the capital of Jilin Province, to unveil the "Rejuvenate the Northeast" campaign. Months following the initiation of this campaign, it appears that Jilin’s preparations are lagging behind China's other Northeastern provinces of Liaoning and Heilongjiang. These provinces have developed detailed plans, while proposals from cities within Jilin are in the preliminary drafting stage, and will be reviewed by the Jilin People’s Congress after February 8, 2004. In November 2003, the Changchun Municipal Government revealed the broad objectives of a three-phase proposal during a meeting with CS Shenyang. Phase I, slated to be completed by the end of 2006, is called preliminary results (chujian chengxiao). It comprises a conclusion period for ongoing SOE programs and a reiteration of current economic development priorities.Changchun expects the Chinese Central Government to provide funding for the following Phase I priorities: completion of state-owned enterprise reform, the creation of a social safety net, and construction of major infrastructure projects. Real implementation of Jilin’s economic rejuvenation plan will begin in 2007 and be completed during 2011. Of
interest to the American business community, Changchun Development and
Planning officials noted that Changchun’s proposal for economic rejuvenation
will be anchored in its two leading industries, transportation equipment
and agricultural chemicals. (Seventy-eight percent of Jilin’s GDP is
attributable to production of autos, auto parts, rail cars, and trucks).
The Changchun 2. China Introduces Enhanced DVD to Evade Huge Licensing Fee China will promote an upgraded consumer electronic product, in place of the DVD (or Digital Video Disk), during this upcoming golden sales season, according to China Digital Disk Technologies Community. A spokesman for the Community said it hoped the new audio and video device, EVD (or Enhanced Versatile Disk), would successfully eat into DVD current market share. Funded by the Chinese Central Government, major Chinese manufacturers initiated research to develop EVD in 1999. Beijing E-world Technology Co., Ltd., part of the Community, said that it has already implemented primary development, chip designing and industrialization for this new technology. The Community applied for 25 EVD techonology related patents and received seven patents so far. Approximately 40 additional patent applications are also in the pipeline. In addition, the Community submitted an application for EVD technical standards to the International Electrotechnical Commission and the International Organization for Standardization. Wang
Jingchuan, Commissioner of China's State Intellectual Property Office
(SIPO), said that by developing and promoting EVD, Chinese companies
gained much experience in competing with their global counterparts in
the high-tech industry.
China will continue to cut its tariff rates according to its commitment to the World Trade Organization, said a senior customs official yesterday. Although the specific figures for tariff rate cuts have not been set for next year, we can be assured that the rates will be on a downward track. Liu Wenjie, deputy director of the General Administration of Customs made the remarks at a press conference in Beijing on the newly released Regulation on Import and Export Duties. Customs revenue reached RMB 338 billion (USD 40.8 billion) through the January-November period, RMB 103.8 billion (USD 12.55 billion) more than that collected during the same period last year. Experts
note that the new Import and Export Duties Regulation, which will replace
the current regulation that was implemented in 1985, have added clear
and specific provisions about the definition of customs value and relevant
tariff rates, which conform to WTO rules. 4. Beijing to Invest RMB 3.2 billion (USD 400 million) to build Garbage Treatment Facilities The year 2008, Beijing will invest RMB 3.2 billion (USD 400 million) to build 15 new garbage treatment facilities on the basis of market mechanics, Mr. Liang Guangsheng, deputy director of the Beijing Municipal Administration Committee, said at a recent working seminar. The 15 new garbage treatment facilities include three sanitary landfill sites, seven comprehensive garbage treatment plants, three garbage incineration facilities and two garbage transfer stations. By the year 2008, Beijing's garbage treatment capacity is expected to reach 12,500 tons per day. Liang
pointed out that Beijing is trying to convert from the traditional government
monopoly on municipal waste treatment to setting up a fair play platform
that encourages foreign investment and domestic social investment on
municipal waste by way of a franchise system.
On the ‘21st Century Forum’ held on December 17, 2003, Mr. Zhang Xiaoqiang, the Vice Minister of the National Development and Reform Commission (NDRC), pointed out that China would further open foreign investment areas. China not only welcomes the big enterprises to invest in China, but also encourages the middle and small enterprises from other countries to invest in China. Foreign investors are especially welcome to invest in modern agriculture, labor-intensive export processing industry, high-tech industry, equipment manufacturing industry, large power plant and new energy, expressway and port, oil and chemical projects, the urban public utilities for business operations, the reform and upgrade of the traditional industries such as the light industry and textile, and the new services industries such as education, culture, entertainment and medical care. Mr.
Zhang said that China welcomes various ways of foreign investment such
as joint ventures, private-owned enterprises, investment companies,
investment fund, BOT, project financing, share, merge and acquisition,
leasing, buying stocks and transferable bonds etc.
China's old coal-fired power stations are causing severe pollution problems, especially in the urban areas, and the Chinese Central Government is keen to convert these stations to gas to alleviate the problem. China has therefore embarked on a major expansion of its gas infrastructure to transport gas from the country’s western gas fields to the eastern population centers. Demand for natural gas is projected to triple by 2010 (to 96.3 bcm3), in particular demand in Jiangsu, Zhejiang and Shanghai is projected to rise to 31.2 bcm3 by 2015. A combination of increased domestic production and the import of gas by pipeline from Russia would meet gas demand. Investment for the trans-China gas pipeline is estimated to be USD 6.7 billion and infrastructure investments including gas distribution networks is estimated to be USD 12 billion. Expansion of China’s infrastructure will create many opportunities for foreign investment and foreign partners are being sought for both upstream and downstream projects. Refinery: China has a total of 95 major oil refineries (56 operated by SINOPEC, 39 by CNPC) with a total handling capacity of 4.27 mbbl/d. Most dated from the 1950's and 1960's and were designed to handle domestic crude. Many substandard and inefficient small plants have been closed in order to make better use of resources (Since 1999 China closed down over half its small refineries). Oil refining capacity will hit 270 million tons over next five years. The output capacity of ethylene will exceed 9 million tons. No
new oil refineries would be considered for approval in China until at
least 2007. The emphasis will instead be on refurbishment, upgrade and
modernizing of existing plant and processes. China lacks adequate refining
capacity suitable for heavier Middle-East crude, which will become a
necessity with increasing imports.
China
Commercial Brief - December 12, 2003 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.
Yi-Wan Railway Has Started Construction
On December 1, the construction of Yi (Chang)-Wan (Zhou) Railway, located in the mountainous Sanxia (Three Gorges) City, formally commenced. Upon completion, together with the Yangtze River and the soon to be completed Hu (Shanghai)-Rong (Chengdu) Highway, this new railway will largely increase the competitive power of the Yangtze River Economic Belt. Following the Three Gorges Dam Project, the Yi-Wan Railway is another large-scale infrastructure project with enormous investment in China. The new railway will be more than 2,000 kilometers long and connect East and West China by traversing seven municipalities and provinces including: Shanghai, Suzhou, Anhui, Jiangxi, Hubei, Chongqing, and Sichuan. It will be built on the bases of the current railways and is planned to be completed in 2008. Upon completion of this project, the Yangtze Grand Railway line will be opened to traffic and will greatly benefit the human and logistic flows between regions. In
addition, the highway project connecting Yichang (where Three Gorges
Project is located) and Enshi has been approved for construction. Upon
completion, this will complete the Chengdu-Shanghai Highway. Logistics Sector Rises in Chengdu The logistics industry has become an investment hot spot in Chengdu as a result of the liberalization of trade following China's WTO accession and the rising efficiency of local enterprises. According to the City Planning Committee, Chengdu has decided to develop four logistics centers in order to boost the development of the local logistics industry. The four logistics centers are Chenghua Logistics Center, Wuhou Logistics Center, Shuangliu Logistics Center, and the International Logistics Center. Wuhou Logistics Center will aim to meet the needs of companies in Chengdu, providing distribution services. It will be a regional logistics center, equipped with a distribution center, sales center, warehousing center, supply-chain management center and purchasing center. Shuangliu Logistics Center, located near the Shuangliu International Airport, will be a typical express parcel logistics center. Currently,
very few foreign freight forwarders have set up a presence in West China.
Since Chengdu was selected as a pilot city for the development of the
central and western region in 1994, the number of manufacturing industries
have increased thereby resulting in a rapid growth in container freight,
although the numbers are still quite low. At present, 80% of the city's
foreign trade products are transported in containers. As the number
of foreign investments and trade volumes in the region grow, demand
for quality freight forwarding services is expected to escalate. Overseas
companies may consider starting their logistics networking in West China
before the market fully opens. In the wake of the Western development,
Chengdu is becoming the region's road and railway transportation hub.
2. RMB 40 Billion Logistics Service Demand for 2008 Olympic A Chinese Olympic Logistics expert said that the 29th Olympic Games to be held in Beijing will incur approximately RMB 41.7 billion (USD 5 billion) in logistics service costs. The logistics demand in support of the Beijing Olympic Games will exceed all previous Olympic Games thereby creating huge business opportunities for domestic and overseas logistics companies in China. Statistics show that in 2008, more than 200 countries and regions will participate in the Beijing Olympic Games, and the set of apparatuses and equipment for athletes, officials and reporters will top 1.2 million pieces. Throughout the entire Olympic season in 2008, more than 75,000 tons of equipment and facilities will need to be transported to Beijing, and over 2,000 transport vehicles of varying types will be used. These efforts will surely bring business to logistics handlers and equipment manufacturers. With
more and more transnational logistics companies, like UPS, DHL,TNT,
entering the Chinese market, China's huge Olympic logistics demand will
become the new target for these logistics giants from overseas.
During a speech at the China Mobile Operator Forum 2003 the spokesperson for Zhang Qi, Director General of the Electronic and Information Products Department of Ministry of Information Industry (MII), indicated that China's telecom equipment industry was facing five major problems: 1)China's telecom equipment industry is suffering from weaknesses in technology development and insufficient investments in R&D; 2)The industry's production capacity has far exceeded market demand; 3)There is an insufficient supply of key domestic telecom equipment components, primarily because the domestic telecom equipment manufactures usually rely on the imported components; 4)Domestic enterprises have been adopting lower prices and lower quality as their marketing strategy, rather than focusing on technological innovation. The domestic companies need to adjust their marketing strategy. 5)The
import of mobile communication equipment is greatly affecting the development
of China's domestic industry. Statistics showed that in 2002, a total
of 17.19 million mobile base stations were imported, and in the first
three quarters of 2003, 18.12 million mobile phones had already been
imported, representing a 79.17% year-on-year growth.
China will soon introduce minimum fuel economy standards for new cars. According to industry analysts, the standards will be significantly more stringent than those of the United States. The new standards are intended to save energy and compel automakers to introduce the latest hybrid engines in China in hopes of easing China's quickly rising dependence on oil imports from Middle East countries. In general, China's new fuel economy standards are applied to new cars, vans and sport utility vehicles (SUV). According to the standards' draft language, large cars would be required to utilize no more than one gallon of fuel per 27.4 miles by 2005 and 30.4 miles by 2008. These new standards will require new cars, vans and SUVs to go as many as 2.7 more miles on each gallon of fuel than the U.S. average. Estimates for the new standards for SUVs are expected to rise by as much as 29% higher by 2008 than current U.S. standards. The new standards will not be applied to pickup trucks and commercial trucks. The affluent urban consumers generally do not even consider buying trucks and instead opt for the smaller passenger-type cars. Various Chinese government agencies still have three months to review the draft standards during which time automakers may lobby for changes. (Source: China Automotive Technology Center, Auto News, 27/11/2003- Translated by Bai Ying) 5. China’s New Moves to Further Open its Banking Industry As of December 1, 2003, and according to its World Trade Organization (WTO) commitments, China officially launched two moves to further open its banking industry: 1.Expanding the number of cities in which foreign banks are permitted to conduct RMB services from 9 (Shanghai, Shenzhen, Tianjin, Dalian, Guangzhou, Zhuhai, Qingdao, Nanjing, and Wuhan) to 13 by adding Jinan, Fuzhou, Chengdu and Chongqing. 2.Allowing eligible foreign banks to provide RMB services, in the above mentioned 13 cities, to domestic enterprises (previously, foreign banks were only allowed to provide RMB services to foreign enterprises, foreign individuals as well as Hong Kong and Macao citizens). According
to China Banking Regulatory Commission (CBRC), China’s banking industry
watchdog, by the end of October 2003, 62 foreign banks had set up a
total of 191 operating entities in China, 84 of which hold a RMB business
license.
China
Commercial Brief - November 28, 2003 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.
The World Bank Plans RMB 8 Billion (USD 1 Billion) Loans to Treat the
Pearl River
According to the Guangdong Provincial World Bank Loans Office, the World Bank is considering loans totaling RMB 8 billion (USD 1 billion) to treat the Pearl River over the next eight years. Since 2001, with approval from China's State Planning Commission and the Ministry of Finance, the World Bank has studied the urban environment in the Pearl River Delta. Based on this study, the World Bank has plans to provide loans up to RMB 8 billion (USD 1 billion) to treat the Pearl River. The pre-evaluation of Guangzhou has been completed; evaluation on Shenzhen will be completed soon. The
Guangzhou projects, to be financed by loans up to RMB1.6 billion (USD
200 million), will include the construction of a 300 km-long urban sewage
pipe system, a sewage treatment facility with daily treatment capacity
of 200,000 tons, and the first-phase of a hazardous solid waste treatment
center with a capacity of 150,000 cubic meters. Shenzhen will also receive
loans amounting to a total of RMB 2 billion (USD 250 million), mainly
for water treatment and supply.
According to a recent report in the China Business Times, the online gaming market witnessed explosive growth from RMB 300 million (USD 37 million) in 2002 to an estimated RMB 1 billion (USD 120 million) in 2003. This market is expected to increase up to RMB 8.34 billion (USD 1.04 billion) by 2006, with a compound growth rate of 92.6% between 2001 and 2006. According to another source, the China Center of Information Industry Development (CCID) estimates the 2003 market size for on-line gaming industry is RMB 1.76 billion (USD 220 million), increasing 73% over the previous year. CCID predicts the market in 2004 will be RMB 3.5 billion (USD 430 million) and RMB 6.2 billion (USD 770 million) by 2005, increasing 78%. According to CCID statistics, the number of on-line game users increased to 14 million by August 2003. The figure is expected to increase to 19 million by end of 2003, 32 million by 2004, and 48 million by 2005, increases year-on-year of 72% and 51%, respectively. There are now 113 on-line games which have been approved to run in China, according to a report published by the Science and Technology Daily. Most of the games are imported from oveaseas, particularly South Korea and Japan. The
big margin growth of the on-line gaming industry will also promote the
growth of many related industries, including: telecommunications, computer
hardware and software, media and publishing.
According to the National Statistics Bureau, industrial enterprises added values above norms, reaching RMB 363.2 billion (US$45.4 billion), representing an increase of 17.2%, 0.9 percentage points higher than the previous month's increase, which is also faster than the first three quarters' average monthly increase of 16.6%. From January-October, 2003, China's industrial added value amounted to RMB 3.268 trillion (US$396 billion) with an increase of 16.7%. In
October, industrial production saw rapid growth in both light and heavy
industries.
At a recent press conference, Mr. Wang Qinping, Deputy Commissioner of China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) revealed that beginning January 1, 2004, China will officially start to use Quality Safety (QS) marks for its food quality and safety. Production and processing will not be permitted without food production licenses for the following 5 categories of food: rice, flower, vegetable oil, soybean sauce, and vinegar. Any products from these 5 categories without a QS mark will not be allowed to be removed from the factories, nor sold into the marketplace. Starting January 1, 2004, all enterprises granted food production licenses will be publicly promoted via AQSIQ related websites. This
food quality and safety program includes three dimensions: first, to
implement the inspection system, i.e. the food production licencing
system that is necessary to guarantee the quality and safety for food
manufacturers and food processing firms; second, implement compulsory
inspection system to foods; and, third, implement the market entry permit
system to food in conformity with quality and safety requirments. A
QS mark must be placed onto foods that meet the inspection requirements.
To date, the department under AQSIQ responsible for these QS marks has
issued food licenses to 11260 different manufacturers.
China recently witnessed its first large development of upscale " villa" class homes incorporating steel frame construction. The Napa Valley development, just north and west of Beijing, includes very posh homes in the 3,500-4,000 square foot range, incorporating the very best interior design features and amenities. Steel frame technology was used throughout the development, making Napa Valley a steel frame demonstration project for China. China
is actively seeking alternative building technologies and products,
as they seek to replace traditional cement block construction with modern,
energy efficient, cheaper building methods. As China has limited timber
resources and traditional Chinese building methods are expensive and
energy inefficient, steel frame systems are of great interest to both
government planners and private developers.
During the three-day session of China's Energy Strategy and Reform International Seminar as part of the China Development Forum held in Beijing from November 15 to 17, 2003, more than 200 Chinese and foreign experts, entrepreneurs and government officials got together and explored China’s energy problems and corresponding strategies to solve them. According to some of the forum's participants, over the next two years, rather than only focus on securing enough resources to sustain economic development, China’s energy policy should elevate the importance of conservation and environmental protection. Such a transformation would be challenging and expansive, requiring billions of dollars of investment to upgrade oil refineries, install sulfur-removal facilities in power plants, improve the efficiency of automobiles, and offer tax rebates to support clean energy. Chen Qingtai, Deputy Director of the Development Research Center under the State Council, said China’s economy has relied too heavily on huge energy consumption, which cannot be sustained due to dwindling domestic energy supplies and increased pollution. He said the government should optimize the energy consumption structure to increase the proportion of clean fuels such as natural gas and renewable energy sources China plans to quadruple its economy by 2020. If it continues on the traditional growth path, energy consumption in China will surge to 3.3 billion tons of standard coal by 2020 from the current 1.4 billion tons. This means China will have to import over 60 percent of the oil we consume. If appropriate policies are adopted to improve conservation and optimize the consumption mix, China will keep its consumption at 2.5 billion tons of standard coal by 2020 and reduce the proportion of coal from its current 67 percent of the energy mix to 60 percent. It
is generally agreed that there is great potential for China to increase
energy efficiency through the adoption of proper technology and economic
incentives for energy conservation and for the application of clean
energy.
China
Commercial Brief - November 14, 2003 The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing. 1.
From Counterfeiter to Franchisee 1. From Counterfeiter to Franchisee For
many years, famous cartoon characters and popular branded consumer However,
in Shanghai's Commodity Fair held on October 21, 2003, the cartoon According
to some experts at the fair, some Chinese companies were engaged 2.
Beijing Urgently Looking for Environmentally Friendly Ice-Thawing Beijing
Municipal Administration Commission (BMAC) is currently seeking Before
the new agent is introduced in Beijing, the plan is to limit the FCS
Beijing Note: U.S. companies that have environmentally friendly 3.
China s Ethylene Industry- Its Present Situation and Prospects for the The
country actually produced 5.4133 million tons of ethylene in 2002, but China
s ethylene industry should focus on expansion of Great
efforts need to be made to refine chemical integration The
country s ethylene industry should utilize domestic Meanwhile,
it is necessary to make effective use of light 4. Further Opening RMB Business to Foreign Banks China
Banking Regulatory Commission (CBRC) recently announced that
(Source:
Financial News, November 7, 2003, Financial News, November 10, 5. Golden Week Brings Big Income For Retailers According
to China's Ministry of Commerce (MOFCOM), major Chinese retailers As
compared to the same holiday period last year, Beijing realized a retail Bestsellers
over the holiday period included sporting goods, electronics, During
the first half of this year as compared to the same period last 6.
South-to-North Water Transfer Project Investments to Peak in 2005 and The
precondition and main target for the planning and implementation of Waste
water treatment projects will line the East Route and cover six
The China Commercial Brief is a a biweekly publication issued by the U.S. Commercial Service - American Embassy, Beijing.
The Shenyang subway project is back on track, after planning was suspended earlier in the year due to lack of financing. The city plans to begin construction of the 22 km. subway line in 2004, which will run east to west. Line two will run north to south along a 69.9 km. stretch and line three will encircle the other two lines. The entire subway system will be completed by 2010. The city of Shenyang has submitted documents to the State Council seeking approval to build a USD 1.15 billion (RMB 9.48 billion) subway system. The city is optimistic about its prospects for approval because its current economic conditions meet the minimum criteria set by the Chinese government. The government imposes the following criteria: total population must exceed 1 million, total revenue must reach RMB 10 million ( USD 1.2 billion), and GDP must be RMB 100 billion (USD 16.93 billion). Last year Shenyang's population was 6.8 million, total revenue was RMB 10.5 billion (USD 1.26 billion), and GDP reached RMB 140 billion (USD 16.9 billion). According
to Shenyang government officials, the city will invest 43 percent of
the project construction costs (RMB 4 billion) over the course of four
years. Daemyung Construction Inc., a company based in South Korea will
invest in the Shenyang subway construction. 2. China Reaches 500 Million Phone Subscribers The Ministry of Information Industry recently released a statement that at the end of September 2003, China phone subscribers exceeded 500 million, reaching 500,442,000 total subscribers. Fixed line subscribers reached 250,468,000 while mobile phone subscribers reached 249,974,000. In recent years, China’s telecommunication sector has experienced rapid growth. In 1978, total phone subscribers totaled only 1.9 million. By 1998, that total reached 100 million. By
the end of 2002, China had 6 basic telecom enterprises and 4,400 value-added
telecommunication enterprises. China has established a modern telecommunication
network with the ability to cover the nation, connecting with international
companies as well as with advanced technological business partners.
3. Chinese Increase Overseas Travel China will have approved 28 countries and regions by the end of October 2003 as Approved Destination Status (ADS) countries and regions for Chinese to travel. Those countries and regions include Singapore, Malaysia, Thailand, Philippine, Australia, New Zealand, South Korea, Japan, Viet Nam, Cambodia, Myanmar, Nepal, India, Brunei, Egypt, Turkey, Malta, German, Sri Lanka, Maldives, India, South Africa, Croatia, Hungary, Pakistan, Cuba, Hong Kong and Macao. In
recent years, China has seen a steady increase of Chinese overseas travel.
16.6 million person/time travels overseas in 2002, a 36.84% increase
over 2001. From January to August this year, the figure reached 11.8
million person/time, a 14.96% increase than the same period of time
last year. China’s traveling citizens have recently become a source
of revenue to other countries in Asia, according to China’s National
Tourism Administration. 4. China Auto Market Growth from January to August, 2003 According to the statistics revealed by China Association of Automobile Manufactures, China's output of motor vehicles totaled 2,781,800 units during the first eight months of 2003, an increase of 36 % as compared to last year. The passenger cars accounted for the biggest growth increase at 92 %, totaling 1,223,400 units by the end of August, 2003, out of which 1,157,500 are domestically made. The total output of motor vehicles including passenger car will exceed five million units by the end of this year. Major automakers in China have seen increased profits in the first eight months of this year. China's top 14 State-owned automakers profits were reported at USD 2.81 billion, an increase of 77 % over last year. However, inventory is also increasing because of the fast growth of output over sales and fierce market competition. Inventory increased to USD 2.83 billion by the end of August, 2003, up 43 % over last year. The
top five auto sellers by the end of August, 2003, include: The First
Automotive Works Corp., Shanghai Automotive Industry Corp., Dongfeng
Motor Co., Chang'an Automotive Corp., and Beijing Automotive Industry
Co.. 5. BOCOG Seeks Designs of Commemorative Coins from Around World for 2008 Olympic Games With BOCOG’s approval, the People’s Bank of China started soliciting the initial design of commemorative coins from all around the world. This campaign started on October 28, 2003 and will end on February 16, 2004. The People’s Bank of China plans to issue 9 general commemorative coins (1 commemorative bank note face value of 20 RMB, 8 general commemorative coins face value of 5 RMB); 31 precious metal commemorative coins (1 gold coin weighed 10kg and face value of 100,000 RMB; 2 gold coins respectively weighed 5oz. and face value of 2,000 RMB; 8 gold coins respectively weighed 1/3oz. and face value of 150 RMB; 2 platinum coins respectively weighed 1/10oz. and face value of 100 RMB; 2 silver coins respectively weighed 1kg and face value of 300 RMB; 16 silver coins respectively weighed 1oz. and face value of 10 RMB). For
detailed information, please visit China Gold Coin Inc.(CGCI): http://www.chinagoldcoin.net/english/index.htm 6. Health Food Registration Applications and Approvals Resumed The State Food and Drug Administration (SFDA) started accepting applications and approvals of health food registrations on October 10, 2003. The State Traditional Chinese Medicine Protection Evaluation Committee has started accepting application materials. The responsibility of approving health food applications has been transferred from the SFDA to the Ministry of Health (MOH). According to the SFDA’s requirements, previously submitted applications that have not been approved but officially accepted by MOH will be evaluated by SFDA based on the regulations and technical requirements previously issued by MOH. SFDA will issue a certificate and approval numbers to those products that meet the requirements. New
applications for registration and applications for modifying the certificate
should be submitted temporarily to the SFDA. SFDA will follow the previously
issued regulations and technical requirements by MOH in giving approval
to applications for registration before a revised version of approval
management and technical requirements is issued.
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not guarantee the veracity of the original sources of our news summaries.
While we do our best to report accurate and timely articles and news
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