Chinese Class: December 2007

Monday, December 31, 2007

Learn Chinese - Airbus enhances aviation ties between China and world

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BIZCHINA / Top Biz News

Airbus enhances aviation ties between China and world

By Dai Yan (chinadaily.com.cn)
Updated: 2007-09-17 17:37

Airbus, a leading European aircraft manufacturer, is trying to enhance
business exchanges between Chinese and international aerospace companies,
a commitment to the development of China's aviation industry.

Aeromart Beijing International Aviation Business Convention, sponsored by
Airbus, China Aviation Industry Corporation I (AVIC I) and AVIC II,
opened today at the China World Trade Center. The event is held in China
for the first time, and is the only official place where one to one
meetings for aerospace buyers, suppliers, and subcontractors are
organized in China.

"I am confident Aeromart will be a success in providing the opportunities
to the Chinese aviation enterprises and those from the rest of the world
to gain better understanding of the Chinese market and to develop
business partnerships with each other," said Marc Bertiaux, Airbus vice
president for cooperation and partnership with China, at the opening
ceremony.

More than 160 overseas aviation enterprises as well as around 70 Chinese
aviation manufacturers participated in the convention. As one of the
sponsors, Airbus is helping to provide them with pre-programmed
face-to-face meetings.

The participants will also be given the opportunity to exhibit or visit
the Beijing Aviation Expo to be held from September 19 to 22, and visit
industrial sites in Beijing, Tianjin, Xi'an, Shenyang, Harbin, and
Chengdu.

The Airbus Day will be arranged in Tianjin on September 20 for
delegations of the international aviation enterprises. The company
representatives will get the chance to meet the Tianjin municipal
government officials, and visit the Airbus A320 assembly plant and
supplier bases at the Tianjin Binhai New Area as well as Airbus' China
facilities.

The Tianjin factory is expected to start assembling the jet next summer
and deliver the first A320 in the first half of 2009. Airbus plans to
assembly 300 A320 aircraft in Tianjin by the beginning of 2016.

Successfully held for 12 years in Toulouse, France, Aeromart sets a
platform for the aeronautical companies to have the maximum number of
contacts and to develop concrete relationships with each other.

(For more biz stories, please visit Industry Updates)

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Chinesepod - 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

"Small businesses are playing an increasingly important role in the
nation's economic development," said Liao.

"But they are still in a weaker position in terms of access to bank loans
compared with large and medium-sized enterprises, especially the
State-owned ones."

"Improving financial services to small businesses and offering more
tailored financial products will be a win-win step for both small firms
and banks."

Small businesses contribute over one-third of China's annual gross
domestic product and have created jobs for 75 percent of the urban
population, along with being responsible for 90 percent of new vacancies
since the beginning of the 1990s.

"Small firms generally do not meet credit standards set for large and
medium-sized enterprises; however, randomly lowering credit standards
creates risk for commercial banks," noted Liao, adding that banking
institutions need to find a balance between risk and profit.

He said that CBRC's efforts have done much to help the nation's
commercial banks set up comparatively independent credit granting
mechanisms, from authorization for credit extension, interest rate
fixing, accounting, auditing, training, evaluating and awarding, to
accountability and disclaiming, as well as credit supervising mechanisms
including new credit line standards for small enterprises and sharing of
small enterprises' credit reputation among different banking institutions.

Official statistics indicate that loans from commercial banks to small
enterprises totaled 5.35 trillion yuan at the end of 2006, up 15.8
percent from the beginning of the same year.

Meanwhile, bad loans accounted for 19.3 percent of the total loans to
small firms at the end of last year, down 5.1 percentage points from its
beginning.

(For more biz stories, please visit Industry Updates)

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Chinesepod - Mainlanders may start direct investment in HK in October

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BIZCHINA / Center

Mainlanders may start direct investment in HK in October

(Xinhua)
Updated: 2007-09-13 16:52

Individual investors from the Chinese mainland are likely to be able to
start trading in Hong Kong shares next month, the Shanghai Securities
News reported on Thursday.

There is little chance the government will launch the scheme this month
as many issues need to be improved, the newspaper cited an unnamed
authoritative source as saying.

The project could begin as early as the week after the National Day
holiday that lasts from October 1 to 7, the source added.

The State Administration of Foreign Exchange announced on August 20 that
mainland individuals would be able to trade directly in HK shares through
the Tianjin branch of Bank of China (BOC) amid efforts to reduce the
country's huge foreign exchange reserves and excessive liquidity.

Zhu Min, vice president of BOC, has said the preparations have gone
smoothly, but it has taken some time to test the settlement system and
educating investors in the risks.

The People's Bank of China is yet to introduce anti-money laundering
measures for residents trading in HK shares, the newspaper said.

Industrial and Commercial Bank of China, China Construction Bank, Bank of
Communications and China Merchants Bank have also filed applications to
conduct the business.

(For more biz stories, please visit Industry Updates)

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Chinese language - World Bank: China's GDP?to grow 11.3%

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BIZCHINA / Top Biz News

World Bank: China's GDP?to grow 11.3%

(Xinhua)
Updated: 2007-09-12 14:14

China's gross domestic product (GDP) is expected to grow by 11.3 percent
in 2007, said the World Bank in its quarterly report on China released on
Wednesday.

China's GDP grew by 11.5 percent in the first half of 2007 from the same
period last year.

The WB has previously revised its projection for China's GDP growth rate
from 9.6 percent to 10.4 percent in its quarterly report released in May.

Wednesday's report held that China's economic growth pattern remains
unchanged, as continued strong external trade and an investment-driven
recovery in domestic demand are still major factors behind the rapid
growth.

According to the World Bank's estimates, the net external trade has
contributed more than one fourth to the aggregate growth, remaining at a
high level as in the second half of 2006.

The trade surplus is adding to domestic liquidity and contributing to
steady asset price increases, share prices in particular, said the report.

The main macroeconomic task remains containing the rising trade surplus,
said the World Bank's report.

The report held that China's consumer price index (CPI), which rose 6.5
percent from a year ago in August, is expected to gradually ease later in
2007 despite upward risks.

Data released by the National Bureau of Statistics (NBS) on Tuesday
showed that the accumulative increase of CPI reached 3.9 percent in the
first eight months, well above the annual goal of three percent set by
the government for 2007.

The report said although the consumer price index has risen to a record
11-year monthly high, it is largely attributed to higher food prices.

Food prices ballooned by 18.2 percent in August, while prices of non-food
products rose 0.9 percent, said the NBS.

It also predicted the galloping Chinese economy would slow down to 10.8
percent in 2008.

(For more biz stories, please visit Industry Updates)

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Sunday, December 30, 2007

Learn Chinese online - Blackstone takes 20% in BlueStar

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BIZCHINA / Center

Blackstone takes 20% in BlueStar

By Zhang Ran (China Daily)
Updated: 2007-09-11 09:13

Leading private equity firm Blackstone Group will spend US$600 million
for a 20 percent stake in China National BlueStar (Group) Corp, the
parent of BlueStar said yesterday.

The deal with the chemical maker marks Blackstone's first investment in
China since it started exploring the Chinese market at the beginning of
the year.

Blackstone will buy the stake from BlueStar's parent company, China
National Chemical Corp, or ChemChina, which will hold the other 80
percent of BlueStar after the deal.

"We believe China's sustained economic growth will support long-term
growth of China's chemical industry," Antony Leung, chairman of
Blackstone Greater China, said yesterday.

Leung, former Hong Kong financial secretary, has been leading Blackstone
to make aggressive moves in China since he assumed the new position nine
months ago.

Earlier in June, the yet-to-be-established state foreign exchange
investment company, which will have US$200 billion in initial funding,
made its first investment by spending US$3 billion to buy a 9.4 percent
stake in Blackstone.

In July, the private equity firm successfully brokered a deal for China
Development Bank to spend US$3 billion to purchase up to 3 percent of the
stake in global bank Barclays.

The deal has helped propel Blackstone to the No 5 position in the M&A
advisory charts for China so far this year, according to data consultancy
Dealogic.

Blackstone will appoint Leung and Ben Jenkins, both senior managing
directors in Asia, to BlueStar's board, the company said yesterday.

Ren Jianxin, president of ChemChina, said he believes Blackstone has
sufficient investment experience in the chemical industry in view of its
investment in chemical makers Celanese and Nalco.

Bluestar, meanwhile, is planning a dual listing in Hong Kong and
Shanghai, local media reported earlier.

The company has three listed companies including New Chemical Materials,
BlueStar Cleaning and Shenyang Chemical Industry. These companies have
suspended share trading since September 6.

(For more biz stories, please visit Industry Updates)

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Learn Mandarin online - World business leaders?eye market expansion in China

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BIZCHINA / Center

World business leaders?eye market expansion in China

(Xinhua)
Updated: 2007-09-09 09:52

World business leaders attending the Summer Davos in Dalian are seeking
to expand their presence in China, which has seen booming economic growth
for nearly three decades.

US banking giant Citibank announced at the meeting it has been approved
by the China Banking Regulatory Commission to open a branch in Dalian
later this year, its eighth in China and the first in the country's
northeastern areas.

"With its infrastructure and outstanding support for foreign investment,
the thriving city of Dalian represents a key city for Citibank's
expansion plans in China," said William Rhodes, chairman of Citibank NA,
at the meeting.

Citibank is among several major international banks that are ramping up
presence in China, particularly after the country fully opened its
banking sector to foreign banks in December last year to fulfill its WTO
commitment.

Chinesepod - Citibank to open branch in Dalian

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BIZCHINA / Center

Citibank to open branch in Dalian

By Liu Wei (China Daily)
Updated: 2007-09-07 09:42

A pedestrian passes a branch of Citibank in Beijing. The foreign lender
has been aprroved to set up a branch in Dalian this year. [newsphoto]?

US banking giant Citibank will roll out a branch in northeast China's
Dalian, after its Hangzhou branch opened in July.

The lender has been approved by the China Banking Regulatory Commission
to open a branch in the city later this year, its eighth in China.

"With its excellent infrastructure and outstanding support for foreign
investment, the thriving city of Dalian represents a key city for Citi's
expansion plans in China," William R Rhodes, chairman, president and
chief executive officer (CEO) of Citibank NA, said yesterday. "Citi is
delighted to be consolidating our presence in Dalian with the opening of
a new branch."

Richard Stanley, CEO of Citi China, said the lender chose Dalian because
of its high demand for banking and wealth management services.

The new branch will offer renminbi and foreign currency products and
services to multinational and local companies, Chinese residents and
foreign nationals.

It will also provide services designed to meet the needs of corporate
customers, such as cash management, electronic banking, structured
corporate finance and research services.

"Citibank will be the first US bank to set up a branch in modern Dalian,"
said Xia Deren, mayor of Dalian. "I believe the establishment of the
branch will further promote the industrial and commercial communications
between the city and America."

Citibank's history in Dalian dates back to 1923, when the lender built
its first Dalian branch. The group had to leave during World War II.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online

Chinese Mandarin - Who's afraid of private equity?

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BIZCHINA / Center

Who's afraid of private equity?

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

"PE funds not only generate returns for investors, but also significantly
enhance the value (for the company) through their portfolio companies,"
the AT Kearney report points out, based on analysis of data from 30,900
PE-financed firms in Europe and the US.

"The results are reflected in rapid sales growth, healthy margins, larger
investment budgets and accelerated expansion into new markets."

According to Zhang Qi, an analyst with Haitong Securities, the average
return on equity in Chinese listed companies is about 10 percent. That
figure is 21 percent for American listed companies.

This indicates a wide gap between the two countries in terms of
management ability to create value. For Chinese companies dissatisfied
with their current performance level and seeking to fill the efficiency
gap, PE is often the perfect fix.

To increase management efficiency, direct investment from a foreign
competitor isn't always the best option for a Chinese company. The
ongoing Danone-Wahaha saga is a pretty good example of the kind of
tensions such marriages can generate, with the underlying fear of the
foreign partner cannibalizing the home market. PE poses no such threat as
it seeks no market, all it wants is profit.

Given the difficulty of securing a controlling stake in State-owned
enterprises in China, investing in high-growth private companies even
with minority stakes makes perfect business sense for many PE firms.

"Unlike American or European owners, who often encounter difficulties in
finding successors when their children refuse to take over the family
business and thus sell their companies to PE, Chinese corporate leaders,
most of whom are first-generation entrepreneurs, won't part with their
controlling stake," says Lily Jin, chief representative of 3i's Beijing
office.

China focus

London-listed 3i has been focusing its investments in China as minority
stakeholders since its entry in 2001.

The average amount of PE invested in a company in the second quarter is
estimated at only US$54 million over US$113 million in the same period
last year, according to the Zero2IPO report.

More PE investors are clearly settling for minority stakes in their
Chinese portfolio companies to avoid risks, as evidenced from the fact
that their average amount invested in targeted companies is on the
decline.

The continuous inflow of new money definitely reflects the pull of the
"China story". A handful of pioneers have indeed made it big by listing
their portfolio companies on overseas stock exchanges such as the NASDAQ.
But the new M&A rule issued by the Ministry of Commerce in September has
set up new hurdles for the traditional overseas listing model of red
chips that most foreign-invested PE investors followed.

"The alternative is to set up a joint venture in China and to prepare for
a domestic listing. We have tried that in some cases, but I have to say
there are great potential risks," says Shen Nanpeng, founder and partner
of Sequoia Capital China.

Unlike the sophisticated NASDAQ, with which PE is familiar, the A-share
listing is a totally different ball game. The lock-in period for foreign
strategic investors to sell shares on the A-share market after an IPO is
three years, much longer than the six-month lock-in period on the NASDAQ
or the New York Stock Exchange.

(For more biz stories, please visit Industry Updates)

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Learn Chinese, Chinesepod

Saturday, December 29, 2007

Chinese language - Stamping out insider trading

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BIZCHINA / Review & Analysis

Stamping out insider trading

(China Daily)
Updated: 2007-09-04 10:59

The recent insider trading cases indicate that there are loopholes in the
information disclosure system for listed companies, says an article on
the website of Hexun. The following is an excerpt:

Soon after the wife of Wang Shi, chairman of Vanke Properties gained huge
profits by trading stocks of Vanke, the wife of a deputy general manager
of Huitian Thermal Power Company received fat returns by purchasing a
large number of Huitian stocks. As the insider trading case of Hangxiao
Steel Structure is still on in our minds, we cannot help but ask: Is
there something wrong with the information disclosure system of listed
companies in China?

According to the regulations before the release of a company's trading
information, any insider is prohibited from making it public or leaking
it, and is not allowed to use it to conduct insider trading. The law
makes it clear that senior managers of listed companies are insiders, but
it does not make it clear whether their relatives are insiders.

In the legal sense, relatives should be deemed as outsiders if they do
not participate in buying stocks, but if they do, it is usually difficult
for the enforcers to gain enough evidence to prove insider trading.

The problem can be solved if we can base our judgment of inside trading
on whether senior managers and their relatives make a massive sale or
purchase of a company's stocks during information disclosure.

If they make a sudden purchase or sale of a listed company's stocks
within days of the information disclosure, we can safely presume that
they had engaged in insider trading.

(For more biz stories, please visit Industry Updates)

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Learn mandarin - Deal inked on sale of China Eastern stake

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BIZCHINA / Center

Deal inked on sale of China Eastern stake

By Jin Jing (China Daily)
Updated: 2007-09-03 09:03

China Eastern Airlines Co Ltd yesterday signed an agreement to sell a
combined 24 percent stake to Singapore Airlines and Lentor Investment Pte
Ltd, a wholly owned subsidiary of Temasek Holdings (Private) Limited, the
Singaporean government's investment arm.

In addition to the new shares issued for sale to its parent company,
China Eastern will raise a total of HK$11.34 billion (US$1.46 billion) in
the proposed transaction.

Special Coverage:
Markets Watch ?
Related readings:
?China Eastern Airlines selling 24% stake
?Singapore Airlines gets nod to invest in China Eastern
?China Eastern to buy 10 A320s with $612.84m
?China Eastern unveils service hotline

Trading in China Eastern's shares is expected to resume today in Hong
Kong and Shanghai after being suspended in late May.

According to the agreement, China Eastern will issue a total of 2.985
billion new H shares for sale to the Singaporean companies at HK$3.8
each, representing a 1.9 percent premium on the closing price of
HK$3.73?on May 21. The company's A-share price closed at 9.6 yuan
(US$1.27) on that day.

China Eastern's parent company, China Eastern Airlines Group, has agreed
to buy 1.1 billion new H shares, while Singapore Airlines will take 1.235
billion and Lentor will purchase 649 million.

After the deal, China Eastern Group's holdings of China Eastern's A
shares will drop from 59.7 percent to 37 percent, while its H-share stake
will increase to 14 percent. Singapore Airlines and Lentor will
respectively own 15.7 percent and 8.3 percent of China Eastern.

According to the agreement, the two airlines will carry out comprehensive
business cooperation, covering air routes, flights, operations, service,
procurement, marketing and training.

"We chose China Eastern as our strategic partner because the networks of
our two airlines do not have much duplication and China Eastern has a big
domestic network, especially in Shanghai, China's financial hub,"
Singapore Airlines Chairman Stephen Lee said at yesterday's press
conference.

Luo Zhuping, board secretary of China Eastern Airlines, said yesterday
that the strategic cooperation will help improve the company's capital
structure and financial position. "The liability/asset ratio of China
Eastern is expected to fall from 95 percent to 80.2 percent," said Luo.

"The net asset value per share is expected to increase from 0.62 yuan?to
1.8 yuan, close to the average level of domestic airlines," he added.

Singapore Airlines has the right to nominate two persons to China
Eastern's board of directors, while Temasek will have the right to
appoint one person to the board, according to the agreement.

"We will assign a total of 12 people to China Eastern," said Kwa Chong
Seng, deputy chairman of Temasek.

(For more biz stories, please visit Industry Updates)

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Chinese School - Creating a unified front

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BIZCHINA / Review & Analysis

Creating a unified front

(China Daily)
Updated: 2007-08-30 11:30

In a big country like China, decisions by the central government are very
likely to fall short of their expected outcomes if those holding
important positions in the fields of social and economic development do
not do their part.

The country's uphill struggle to achieve its energy-saving and
pollution-reduction goals is a case in point.

Although sulfur dioxide emissions and energy consumption per unit of GDP
both fell in the first six months in comparison with the same period of
last year, the country missed its goals in both battlefields last year.

This means the chances that the country will achieve its self-imposed
objectives in energy saving and environment protection will be even
smaller: China promised that it will cut energy consumption per unit of
GDP by 20 percent while reducing major pollutants by 10 percent between
2006 and 2010.

Therefore, it is of vital importance that those who are able to shape the
country's political and economic landscape be brought in line with the
central government's vision.

Li Rongrong, minister in charge of the State-owned Assets Supervision and
Administration Commission, announced yesterday that an accountability
system will be set up for officials working for enterprises under the
direct management of the central government in an attempt to tie such
firms to the conservation effort.

The minister said that starting next month, all newly appointed senior
managers of these enterprises will be evaluated according to their
performance in energy saving and pollutant reduction.

In a similar move, Ma Kai, the country's top economic planner announced
on Sunday that increasing energy efficiency and efforts to reduce
pollutant emissions will be the major criteria when it comes time to
elect officials at the provincial level in the latter half of this year.

(For more biz stories, please visit Industry Updates)

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Learn mandarin - Strategic partnership, shared responsibilities

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BIZCHINA / Review & Analysis

Strategic partnership, shared responsibilities

By Yang Cheng (China Daily)
Updated: 2007-08-27 17:32

Germany and China should join hands to push their partnership of shared
responsibility to new heights.

Michael Schaefer, the new German Ambassador to China, praised the
bilateral relationship between the two countries, adding: "The present
relationship between the two countries goes far beyond economic exchange.
We have enormous opportunities in strategic partnership in a wide range
of areas."

German Chancellor Angela Merkel visited China last year not long after
taking office, Premier Wen Jiabao visited Germany in August 2006, and
President Hu Jintao went to Germany in June for the G8 Outreach Summit
are all signs of close bilateral cooperation.

"The leadership on both sides place great importance on our mutual
cooperation," said Schaefer, who worked as Political Director in the
German Ministry of Foreign Affairs for the last five years and has taken
part in many foreign affairs negotiations with China.

"The Chinese and German civil society and business circles are showing
stronger interest in each other," he said. Schaefer cited the successful
third Sino-German Strategic Dialogue Forum from July 9 to 11 in Berlin,
aiming to expand cooperation between the nations.

Ambassador Schaefer hopes the two nations can make joint efforts to meet
future challenges and tap the enormous opportunities ahead.

"I hope to contribute my bit to try to help Germany and China address
global issues together, such as energy security and environmental
protection or foreign policy and security challenges," he said.

In the framework of the Heiligendamm process, kicked off at the G8 summit
meeting in June 2007, the two nations will cooperate to address climate
change and work together to reach sustainable solutions, bilaterally as
well as multilaterally.

China and Germany should work together to push forward the important
Post-Kyoto framework, and to help build the foundations for worldwide
sustainable development, the ambassador noted.

The UN's Post-Kyoto framework should be put on track at a conference in
Bali in December 2007, and the two nations as important participants from
Europe and Asia can significantly impact the framework, resulting in a
sustainable, long-term protection of the environment.

"Apart from this, we hope to continue to make key areas such as energy
security, including issues like water management, top priorities," he
said.

The two nations' cooperation on global security, such as the North Korea
and Iran nuclear issues as well as the situation in Sudan and other
African security issues, are also important areas of concern.

"Both nations are active players and stakeholders in global security.
Germany is supporting China to play an active role in finding lasting
solutions to such challenges," he said.

"We are fully aware of China's philosophy of a harmonious society and
world, and we need to find a balance between interests and
responsibility," he said. "We are committed to finding win-win
situations."

High on German Chancellor Angela Merkel's agenda on her visit to China is
the launch of the three-year cultural campaign, "Germany and China -
Moving ahead together".

A concert will be held in Zhongshan Music Hall tonight to kick off the
event and celebrate the 35th anniversary of the establishment of the
Sino-German diplomatic relationship.

(For more biz stories, please visit Industry Updates)

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Friday, December 28, 2007

Learn Chinese online - In real-estate market, small now beautiful

CHINA / National

In real-estate market, small now beautiful
By Fu Jing (China Daily)
Updated: 2006-05-31 05:49

The importance of urban housing in the country's next stage of
development has been starkly illustrated by recent strong measures to
cool down the overheated sector.

Residents in Nanjing, capital of East China's Nanjing Province, walk past
a newly-constructed apartment building May 10, 2005. [newsphoto]

The effort is primarily focused on a few cities Beijing, Shanghai and
some in the Pearl River Delta, the nation's largest manufacturing base.

In the first quarter this year, house prices jumped 15 per cent in the
capital and 35 per cent in Shenzhen, a booming city in Guangdong Province.

The key measures of the central government's latest package of housing
market policies, announced on Monday and promptly dubbed "the 15 points"
by industry observers and press commentators are:

The minimum down payment for a new apartment larger than 90 square metres
will be raised from 20 per cent to 30 per cent of the total price;

A transaction tax will be imposed on people reselling their properties
within five years of purchase, instead of the current two years.

Social scientists and media commentators have generally welcomed the
policies in interviews with China Daily, and urged the government to
implement them effectively and skilfully.

A steady supply of housing is essential for low- and middle-income groups
in the cities for three strategic reasons, said Han Meng, a researcher
with the Institute of Economics at the Chinese Academy of Social
Sciences. They are:

To slow down the growth in fixed-asset investment;

To rein in the continuing rise in property prices; and

To prevent urban housing issues from causing other social problems.

Bai Nansheng, a professor at Renmin University of China, said that
housing expenses are already claiming too much of the total income of
young city-dwellers, squeezing out spending in education and other
activities.

Yu Zhiyong, a real-estate analyst with China Merchants Securities, noted
that the Ministry of Supervision, a disciplinary enforcement authority,
is for the first time one of the nine central government agencies to
jointly sign the "15 points".

Anna Kalifa, Beijing-based head of research of Jones Lang LaSalle, an
international real-estate consulting firm, told China Daily that for
first-time buyers eyeing a modest home, the policies are welcome because
70 per cent of all houses are required to be smaller than 90 square
metres.

At the same time, Wang Yu, an urban planning official in Guangzhou, is
happy because land-related information which some property developers
have kept vague has to be made public. That requirement will make it
tough to manipulate prices, he said.

The policies will also discourage developers from building bigger and
more expensive units while most home buyers are demanding smaller units.

In Shanghai, industry insiders say they believe the new policies are
unlikely to have as strong an impact as last year when tough local and
central regulations came into place.

According to Zhang Yuliang, president of Greenland Group, one of the
largest property developers in Shanghai, many of the policies announced
by the central government have already been implemented in the city. As a
result, fewer increases have been reported in housing prices for about a
year.

Local developers have "already garnered the experience" to cope with
abrupt policy changes, said Chen Ning, vice-president of Dahua Group, a
real-estate company in Shanghai.

Zhang Yu in Shanghai and Zhan Lisheng in Guangzhou contributed to the
story

(China Daily 05/31/2006 page1)

Learn Mandarin online - Please the lady, sell the stuff

? ?

BIZCHINA / Biz Life

Please the lady, sell the stuff

By Jiang Jingjing (China Daily)
Updated: 2007-08-24 10:29

Chinese women have become a major consumer force with distinct
characteristics that need to be closely watched if companies are to
succeed in prying open women's wallets, says Ernst & Young.

In a report entitled The Rise of Female Consumerism in China, the
professional services provider found huge economic and social changes in
China in recent decades have had a dramatic impact on the average female
consumer, which has far-reaching effects on spending patterns.

Conway Lee, partner and industry leader of retail and consumer products
practice at Ernst & Young, said the economic status of modern Chinese
women has been greatly influenced by the rapidly changing environment, a
woman's educational background and the commercial opportunities open to
her.

"This means that not only does she have control over how she spends her
own money, but she also has a big influence over how household income is
spent - perhaps more than people actually realize," Lee said.

The report says women have a substantial say over how paychecks are
spent, noting that 78 percent of married women make the decisions for
grocery and clothing purchases for the family.

When it comes to big-ticket purchases, such as cars and houses, 23
percent of married women indicated they have the ability to make
independent purchase decisions. The remaining 77 percent said decisions
are made after spousal discussions - however, they said their personal
preferences have a major influence over the final decision.

The rising economic influence of women is causing a level of female
empowerment unprecedented in the history of China, particularly as women
choose to increasingly express themselves in society in new ways that are
outside the more "traditional" roles as mother or nurturer, Lee said.

"Women are more economically independent overall than before. Backed by
economic and social change, greater gender equality is giving rise to
what we call the 'female yuan', a part of spending which is powerful and
gaining in currency by the day."

Some 88 percent of Chinese women in cities would continue to work to earn
their own income even if their husbands or families could financially
support them to stay at home, according to the report.

More women choose to spend today and save tomorrow: 65 percent of female
consumers spend 60 percent or more of their salary.

The total purchasing power of young women living on their own or married
in childless households is projected to rise to $260 billion in 2015 from
$180 billion in 2005.

David Lung, partner of the retail and consumer products practice of Ernst
& Young, said Chinese women are shaping the consumer landscape in China
to such a degree that companies need to have a profound awareness of who
these consumers are and what their needs are.

"Failure to do so may undermine a company's ambitions in one of the
world's biggest and most exciting consumer markets," he noted.

The report also says the '80s generation, a product of China's one-child
policy, have a higher propensity to spend and as a consequence, has led
to the deferment of savings to the future. Consumption patterns show that
even lower-income urban women are willing to spend a large portion of
their income on aspirational goods.

Luxury goods project wealth, status and sophistication, and tend to
reinforce the notions of social and career advancement. This means
retailers need to adjust their market positioning to reflect women's
aspirations, especially since this generation will be regular consumers
of luxury items as they enter their 30s and beyond, Lung said.

For foreign and domestic retailers, this is significant because China's
luxury goods market is the third largest and among the fastest growing in
the world. Moreover, as female empowerment is also influencing purchases
at home, the impact is felt beyond the retail industry.

"This isn't just about cosmetics and jewelry. 'Female yuan' also means
greater participation by women in economic decisions that were
traditionally thought to be the preserve of men," Lee noted.

So companies selling real estate, cars, financial services and products,
which typically marketed their products to appeal to men, should be aware
of repositioning themselves so that they equally appeal to women, he said.

(For more biz stories, please visit Industry Updates)

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Chinese Online Class - Extend product footprint

? ?

BIZCHINA / Review & Analysis

Extend product footprint

By Marthin DeBeer (China Daily)
Updated: 2007-08-22 11:41

Companies must innovate continuously to stay relevant, otherwise they
will risk losing ground to nimbler competitors. Although innovation
occurs throughout healthy organizations, it is the technological
innovation and introduction of new disruptive product offerings that has
the greatest potential to drive growth.

There are three basic approaches to extending your company's product
footprint.

The most common form of innovation is the organic, incremental
enhancement of existing product portfolios. Most organizations embrace
this strategy because it is comfortable for them.

Given a company's strong knowledge of the current market and its
requirements, the risks appear minimal and can be managed with existing
processes. But relying solely on this strategy is a trap. Although
organic growth can extend the life of a product set, market maturation
eventually creates an environment of diminishing returns.

The second form of innovation is the acquisition of outside talent and
solutions that fit new product and technology niches. Smaller, more
nimble innovators tend to address minor challenges that augment the
offerings of established vendors. Acquisitions can deliver quick access
to untapped opportunity and help companies move into adjacent markets,
but they can also pose challenges. The acquired and the acquirer must be
close matches in technology and culture for a successful integration. And
the acquired products nearly always require further development to ensure
integration with existing products, delaying the desired rise in revenue.

The third strategy for innovation, and a very important one, is internal
venturing. Successful internal innovation permits a company to gain
access to adjacent markets with new solutions that disrupt those markets,
creating an environment of opportunity and expansion. Although adjacent
markets can provide strong prospects for growth on their own, it is
important to maintain architectural integration with existing products as
this inevitably creates an opportunity for disruption in adjacent markets
and long-term differentiation. Properly implemented, internal venturing
is well suited to take advantage of all the complementary assets of the
corporation - brand, sales force, channels, and so on - thereby creating
a total product offering that is greater in value than the sum of the
parts.

Healthy internal ventures

From experience in the process of internal innovation, Cisco has
identified several keys to a healthy internal venture strategy:

Create a dedicated team not distracted by current business operations. By
their nature, internal ventures seek to create new, disruptive
technologies. These technologies must have an opportunity to grow without
being beholden to more powerful entities in the organization. Without a
degree of autonomy, many good but misunderstood technologies could
succumb to pressure from the rest of the business before they have a
chance to take root. Or worse, the new technology could be forced into a
support role for an existing product offering.

(For more biz stories, please visit Industry Updates)

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Chinese Online Class - 246 Chinese back home from E. Timor

CHINA / National

246 Chinese back home from E. Timor
(Xinhua)
Updated: 2006-05-30 05:52

Two chartered planes carrying a total of 246 Chinese from riot-torn East
Timor arrived at the Gaoqi international airport of Xiamen, a coastal
city in east China's Fujian Province Monday night.

Shi Xiaoyu and 16 of her colleagues from the Shandong Foreign Trade
Corporation arrive at Xiamen airport last night. They were among 246
Chinese who were evacuated from turmoil-plagued East Timor by two
government planes. [newsphoto]

Officials with China's Foreign Ministry, Ministry of Public Security,
Overseas Chinese Affairs Office of the State Council and the provincial
and city governments greeted the evacuated Chinese at the airport.

The officials queued in a long line, shaking hands with the evacuees, who
waved China's national flags as they got off the planes.

"I felt so relieved when seeing them back home safely," Zhu Taoying,
deputy general director of the consulate department under the Foreign
Ministry.

The evacuees, many of them serving as businessmen, engineers and workers
in East Timor, were from a dozen provinces on the Chinese mainland as
well as the Hong Kong and Macao Special Administrative Regions.

At the airport entrance, provincial officials were waiting for the
evacuees, raising high plates with their names, and took them away for
their hometown with buses.

A Timorese girl looks out from the gates of her home in the East Timor
capital of Dili May 29, 2006. East Timor's government met for crisis
talks on Monday as foreign troops patrolled a tense but largely peaceful
capital after a weekend of violence by gangs allied to feuding factions
of the country's armed forces. [Reuters]

"I just left all my properties there and return by the chartered plane,"
said Wang Deren, a mid-aged man from Fujian Province who ran a grocery in
East Timor.

Wang said he sought shelter in the Chinese embassy in East Timor after
the riot broke out. "Almost all the Chinese in East Timor fled to the
embassy and we made a big crowd there."

China's Foreign Ministry said on Saturday that nearly 200 Chinese
citizens had sought shelter in the Chinese Embassy in East Timor, where
they were offered tents, food, water, medicine and other living
necessities.

The youngest evacuee was a three-month-old baby girl who returned in the
arms of her uncle.

"Her parents chose to stay in East Timor taking care of their business.
They asked me to bring my little niece back to China which they believe
is the safest place under heaven," said the uncle.

The ministry said earlier that about 500 Chinese lived in East Timor,
among whom about 200 had already left.

An official with the Foreign Ministry said China will continue to closely
follow the situation in East Timor and make all efforts to ensure the
safety of the Chinese, including Hong Kong, Macao and Taiwan compatriots,
who chose to remain in the tiny country.

Among the evacuees, 61-year-old man surnamed Zhan was a Chinese-East
Timorese. He was born in East Timor and currently serves as a member of
East Timor's chamber of commerce.

Zhan said this was the first time he was in China. "I knew little about
the People's Republic of China in the past. I didn't expect that I had
the honor to take the Chinese government's chartered plane to leave the
dangers in East Timor."

The Chinese government has agreed to help him go to Macao and stay there
until peace is restored in East Timor, he added.

So far, there has been no report of Chinese citizens being injured or
killed in the riot, according to the Foreign Ministry.

To better protect Chinese overseas, the Foreign Ministry on Monday set up
a new section under its consular department to focus on providing
protection and help to these people.

Violence took place in East Timor in late April after the East Timorese
government decided to sack almost half of the country's soldiers, who
protested against poor conditions and staged a strike.

The situation in East Timor deteriorated on Thursday when at least nine
people were killed and 27 others wounded.

As a result of the turmoil at home, East Timor President Xanana Gusmao
postponed his China visit, which was originally scheduled from May 29 to
June 3.

Last month, China evacuated 325 Chinese nationals, including over 20 Hong
Kong compatriots, from the unrest-hit Solomon Islands, which doesn't have
diplomatic ties with China.

East Timor, which shares a land border with Indonesia's West Timor, is a
former Portuguese colony. The country became the world's newest nation in
May 2002.

Thursday, December 27, 2007

Learn Chinese - New rich 'shockingly' young

? ?

BIZCHINA / Biz Life

New rich 'shockingly' young

(Xinhua)
Updated: 2007-08-16 15:06

China's new rich are exceptionally younger than those in its neigboring
countries and they are more keen on investing in the country's booming
real estate market, a survey by credit card company MasterCard said.

MasterCard surveyed 900 people and interviewed 300 families in Beijing,
Shanghai and Guangzhou whose annual income are above 16,000 U.S. dollars.

The survey showed that at least one quarter are among the affluent by
internationally recognized standards, who earn more than 50,000 U.S.
dollars annually.

Yuwa Hedrick-Wong, MasterCard's economic advisor, said the Chinese
affluent people are "shockingly young" compared with their counterparts
in developed countries, citing the survey results that 64 percent of the
rich people are from 31 to 46 years old.

Statistics showed that about 70 percent of the Japanese rich are older
than 45 years old. In another developing nation, the Philippines, 95
percent of the rich are older than 45.

Wong analyzed that young employees of multinational companies, senior
members of the management of state-owned enterprises and business people
in the private sector are the bulk of the Chinese urban rich.

The survey also indicated that every household of the affluent population
own at least one apartment. Some 26 percent of the surveyed each have
bought three apartments, or a villa, and eight percent bought four
apartments.

Most affluent people expect that investment in apartments would make them
wealthier in the thriving Chinese real estate market, Wong said.
Meanwhile, they also have other channels for earn profits, such as
securities, for financial investment.

The affluent people, according to the survey, usually favor spending more
time with their families. They value happy families as "the most
important for a successful life."

Some 73.6 percent of the surveyed said they are willing to donate for
charity.

A total of 92.6 percent affluent people spent more than 10,000 U.S.
dollars in traveling in 2006. Hong Kong, Macao, Thailand, Singapore and
Japan were usually their favorite destinations.

(For more biz stories, please visit Industry Updates)

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Learn Mandarin online - Auto industry profit rises 65.79% despite price cuts

? ?

BIZCHINA / Center

Auto industry profit rises 65.79% despite price cuts

By Rong Xiandong (chinadaily.com.cn)
Updated: 2007-08-14 17:10

China's automobile industry experienced a 65.79 percent profit rise in
the first half of this year, despite heated market competition and
wide-ranging price cuts, according to an industry body, the Xinhuanet
reported today.

Major domestic automakers reported a total profit of 30.21 billion yuan
(US$3.99 billion) in the first six months, an increase of 11.99 billion
yuan over the same period last year, statistics from the China
Association of Automobile Manufacturers show.

Related readings:
?Auto sales, output soar over 20% in 1st 7 months
?Used car sales set to accelerate
?Passenger vehicle sales rise 24% in 1st 7 months
?Strong vehicle sales drive up profits by 66%

The auto industry created 109.15 billion yuan in industrial added value
during the period, up 34.13 percent over the first half of last year, far
outpacing 18.50 percent for the country's industry as a whole.

Among the 16 major automakers, 14 saw this year's core business revenue
larger than that of the same period last year, except Hafei Automobile
Group and Changhe Automobile Co.

The top three automakers, First Automotive Works Corp (FAW), Shanghai
Automotive Industry Corp (SAIC) and Dongfeng Motor Corp, all recorded
revenues of more than 80 million yuan in the first half, compared to a
total of 486.38 billion yuan for the 16 firms.

The three giants were followed by Guangzhou Automobile Group, Beijing
Automobile Industry Corp, Changan Automobile Group, Brilliance China
Automotive Holdings Ltd, China National Heavy Duty Truck Group Co
(Sinotruk), Chery Automobile Co and Jianghuai Automobile Group.

Although the ferocious price war has eaten into new model profits, almost
all the major automakers witnessed substantial profit rises, from both
domestic and joint-venture brands, said Guo Yong, market information
director of the Beijing Asian Games Village Automobile Exchange, one of
the barometers of the automobile industry.

In the first half, major automakers in China, except a few including FAW
Toyota Motor Co and Guangzhou Honda Automobile Co, joined the price war
to woo consumers.

Guo mainly attributed the rising profits to an economy of scale.

Chery, one of China's independent automakers, led the profit increases
among the 16 automakers with a 210.63 percent rise, trailed by Guangzhou
Auto with 150.27 percent and Sinotruk at 142.95.

(For more biz stories, please visit Industry Updates)

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Chinese School - Consumer price inflation hits 10-year high

? ?

BIZCHINA / News

Consumer price inflation hits 10-year high

By Dong Zhixin (Chinadaily.com.cn)
Updated: 2007-08-13 14:20

Consumer price inflation in China accelerated to the highest level in
more than 10 years as food prices continue to rise, official figure
released on Monday showed, raising the pressure for the fourth interest
rate hike this year.

The Consumer Price Index (CPI), a barometer of inflation, grew 5.6
percent in July, after a 4.4 percent rise in the previous month, the
National Bureau of Statistics said in a statement on its website.

By contrast, Producer Product Index (PPI), a measure of inflation at the
wholesale level, slowed down to 2.4 percent in July from June's 2.5
percent, the bureau said on Friday.

In a breakdown of July's CPI figure, food prices jumped 15.4 percent,
while non-food items rose only 0.9 percent, the statement showed.

Among foodstuffs, meat and meat products reported the biggest jump, up
45.2 percent, followed by a 30.6 percent increase in eggs and a 30.1
percent rise in cooking oil. Grain prices went up 6.0 percent.

In July, the rural areas saw 6.3 percent price increase, compared with
5.3 percent for the urban areas, according to the bureau.

Inflation risks were on the rise, the central bank admitted in its second
quarter monetary report on Wednesday. It vowed to take necessary measures
to keep the basic stability in prices.

China has raised interest rates three times so far this year, with the
latest coming on July 20 when the benchmark one-year deposit rate rose to
3.33 percent. That rate hike is coupled with a reduction of interest tax
on bank deposits to five percent from 20 percent.

However, the return on deposits is still below the inflation rate,
indicating a loss of purchasing power if people put their money into
banks.

That is encouraging an exodus of bank deposits to the country's red-hot
stock market, which has soared 77.53 percent so far this year on top of a
130 percent rally in 2006, fueling concerns of bubbles building in the
market.

In response, analysts expect the central bank to raise the interest rates
again in the coming months to turn the real interest rate positive,
partly to offset the impact of rising prices and partly to curb the flow
of money into the equity market.

Price hike, especially in foodstuffs, is very sensitive in China as the
Chinese has a relatively low disposable income and food accounts for a
major part in people's daily spending. In 2006, the disposal income for
urban residents stood at 11,759 yuan, and at 3,587 yuan for rural
residents.

NDRC, the country's top price regulator, has ordered a crackdown on the
manipulation of food prices, after several industry associations and
firms announced plans to raise prices, including instant noodles and
Chinese fast-food chains.

Meanwhile, the Ministry of Civil Affairs raised the urban minimum living
allowance for low-income families by 15 yuan a month.

The State Information Center (SIC), a think-tank under the National
Development and Reform Commission (NDRC), agreed on the mounting price
hike pressure, but sought to play down concerns over full-scale,
significant inflation in a report on Friday, citing stable prices of
manufactured products.

Related readings:
?Time to restructure the CPI
?Economists: 4% CPI rise still healthy
?Central bank warns of inflation risks
?China to crack down on price-hiking producers, sellers

Lu Zhongyuan of Development Research Center of the State Council echoed
SIC's point. In the first six months, the core CPI, excluding food and
energy, rose a mere 0.9 percent, indicating the inflation is running at a
low level, Lu said.

The rationale behind using core CPI instead of CPI is that food and
energy prices are vulnerable to changes in weather and international
political situations and is not a good reflection of substantial change
in demand and supply.

However, the central bank suggests close attention be paid to food prices
as, unlike in developed countries, food accounts for 34 percent of
China's CPI.

The State Information Center put the CPI growth in the third quarter at
4.3 percent, up from 3.2 percent for the first half of this year, while
anticipating the growth slow down in the fourth quarter as food prices
will gradually fall due to greater supplies.

(For more biz stories, please visit Industry Updates)

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Learn mandarin - Bluestar seeks overseas expansion for growth

? ?

BIZCHINA / Center

Bluestar seeks overseas expansion for growth

By Xiao Wan (China Daily)
Updated: 2007-08-10 11:26

China National Bluestar (Group) Corp, one of the nation's largest
chemical companies, eyes overseas expansion as a key driver of its
development.

"Through overseas mergers and acquisitions, Bluestar has greatly enhanced
its technology and management level. We will continue the overseas
strategy to make the company more multinational," said Ren Jianxin,
president of China National Chemical Corp, parent of Bluestar.

Bluestar has 15 plants and seven research and service institutes overseas
apart from 25 plants and four research and development institutes in
China. The company's annual sales revenue has surpassed 30 billion yuan.

In early 2006, Bluestar acquired France-based Adisseo Group, a
world-leading animal nutritional feed firm specializing in producing
methionine, vitamin and biological enzyme.

The deal, which has extended Bluestar's product line, made the company
the world's second-largest producer in the field of methionine.

China, though a big agricultural country, could not produce methionine
before and imports in 2005 stood at 120,000 tons. Experts predict that
demand will grow between 10 and 15 percent each year in the coming years.

In October 2006, Bluestar bought French company Rhodia's organic silicon
business, including its patents, manufacturing equipment and distribution
channels as well as the company's sulphide business.

The acquisition has upgraded Bluestar's organic silicon business, making
it the third largest producer in the world. "We plan to become the
world's No 2 in two years," said Ren.

With the two deals, Bluestar has become the largest Chinese investor in
France.

"We highly value the achievement the companies have made in the past,"
said Ren.

The company has been focusing on the chemical products and new materials
businesses, which has resulted in the success of mergers and
acquisitions, he said.

It will continue to talk with some foreign firms for investment
opportunities. It is also considering introducing some strategic
investors, according to sources close to the company.

The company will further integrate its businesses and then plans to list
in its entirety, added the sources.

Established in 1984 with only 10,000 yuan, Ren has led the company to
become the nation's leading chemical products and new materials
manufacturer in 20 years.

(For more biz stories, please visit Industry Updates)

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Wednesday, December 26, 2007

Learn Chinese online - Economists: 4% CPI rise still healthy

? ?

BIZCHINA / Center

Economists: 4% CPI rise still healthy

(chinadaily.com.cn)
Updated: 2007-08-09 16:15

Despite expert predictions that the Consumer Price Index (CPI) may reach
5.6 percent growth in July and 4 percent for all of 2007, China
Securities Journal (CSJ) cited the newly released Monetary Policy
Implementation Report by the central bank as saying the real CPI increase
is not as big as people thought.

The advancing CPI has caused questions among investors as to whether the
inflation is serious enough to justify intensified government macro
control.

Experts said considering the growth pace of China's economy, the previous
3 percent CPI warning rate should be upgraded to 4 percent.

Related readings:
?Central bank warns of inflation risks
?China increases urban minimum living subsidy in wake of inflation
?Economist: CPI to rise less than 4% in 2007
?CPI may grow 5% in July?Regulator cracks down on price manipulation

According to CSJ, monthly CPI growth in the 5 percent range doesn't
reflect long-term inflation. Xie Fuzhan, head of the National Bureau of
Statistics said late last month that there is no clear sign that China is
facing inflation. In fact, short-term price increases exert little effect
on the whole economy in the long run. China's CPI in 2007 can reach 4
percent, but even that can still be healthy, he added.

The booming Chinese economy, with an annual growth rate of over 10
percent, has been pushing up prices of consumer goods. Shen Minggao,
chief economist of Citibank China said the 3 percent CPI growth limit may
only apply to an 8 percent GDP growth; given the 11.5 percent GDP in the
first half of the year, a 4.5 to 5 percent increase is acceptable.

The United States usually has an economic growth below 3 percent, while
the latest released CPI reached 2.7 percent growth, almost the same rate
as economic growth. Even taking account their different stages of
economic development, the difference between the two countries can be
surprisingly big, Shen added.

Another driving force behind the CPI are rising salaries, with urban
residents' disposable income increasing 10.4 percent last year and 14.2
percent the first half of this year and rural residents' disposable
income growing 13.3 percent. Higher incomes are driving up market prices.

The report by the central bank also included inflation pushers such as
rising labor and energy costs, which may cause inflation in the middle
and long term.

(For more biz stories, please visit Industry Updates)

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Learn Chinese - Chery, Fiat?reach local JV pact

? ?

BIZCHINA / Center

Chery, Fiat?reach local JV pact

By Gong Zhengzheng (China Daily)
Updated: 2007-08-08 10:01

Chery Automobile, the No 7 local auto group by first-half sales, said
yesterday it had signed a memorandum of understanding with Italy's Fiat
to form a joint venture to make cars under both badges for the local
market.

The 50-50 venture, to be located in the eastern city of Wuhu, Chery's
home base, will start building and marketing cars under the Fiat, Alfa
Romeo and Chery badges in 2009, with an annual production of 175,000
units, the Chinese carmaker said.

But it hasn't revealed how much the two parties will spend on the venture
and what specific models will be introduced, saying the project still
needs government approval.

The move came after the Chinese firm and Fiat announced on Monday that
they had finalized an engine purchase deal, enabling the Chinese carmaker
to supply more than 100,000 1.6- and 1.8-liter petrol engines per year
for Fiat cars assembled in China and abroad.

A model poses with a Chery A5 at an exhibition in Shanghai. [newsphoto]?

In July, Chery also struck a deal with Chrysler to assemble cars in China
bearing marques from the US carmaker for the North American and European
markets.

Li Chunbo, an auto analyst with CITIC Securities Co in Beijing, said
Chery, which has remained staunchly independent in the past, will benefit
a lot from the collaborations.

"These tie-ups will greatly help Chery boost its development, sales and
profits," Li said.

Chery plans to raise its annual sales to 1 million cars by 2010 from more
than 400,000 units expected this year.

Its sales in the first six months of this year jumped by 43.6 percent to
207,100 units.

Related readings:
?Strong vehicle sales drive up profits by 66%
?Chery, Chrysler in new-brand talks
?Home-grown auto brands eager to shed low-grade image
?Chery's exports quadruple in 1st half

Teaming up with Chery will give Fiat, which has seen sluggish China sales
in recent years, a boost in the world's second-biggest and fast-growing
vehicle market.

Sergio Marchionne, the Italian carmaker's chief executive officer, said
in a statement that the deal with Chery represents a "milestone" for Alfa
Romeo's global expansion and will facilitate development of Fiat's brand
in China.

Fiat said last month that it aims to boost China sales to 263,000 cars a
year by 2010 from 32,000 units in 2006, and will introduce a slew of new
models into the country in coming years, such as the Linea, Grande Punto
and Alfa Romeo 159.

But analysts said the tie-up with Chery will be a blow to Fiat's already
fragile partnership with another Chinese automaker, Nanjing Automobile
Corp.

Fiat started making its cars at the venture with Nanjing Automobile in
2001. But the venture has been in the red for years due to poor sales.

Sources familiar with the situation said Fiat might pull out of the
venture after its sales tumbled by one-third to 10,817 cars in the first
six months of this year.

Sales of all China-made vehicles surged by 23.3 percent to 4.37 million
units, according to industry data.

Full-year sales are forecast to hit 8.5 million units, up from 7.22
million in 2006.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - Riding the bull is certainly not easy sport

? ?

BIZCHINA / News

Riding the bull is certainly not easy sport

By Hu Yuanyuan (China Daily)
Updated: 2007-08-07 08:41

It's a record: 13 million yuan (US$1.72 million) in 103 days. That won
Wang Xiujie a sobriquet, too: "Big Brother Leader 777". But the nouveau
riche's story didn't end like a fairy tale. He has been arrested for
running an unlicensed securities consultancy business.

So what's the story behind the story? The answer lies in the charge of
the bull in the stock market and the ever-increasing number of small
investors. The Shanghai Composite Index has catapulted from 2715 on
January 4 to above 4600 today. And during its peak, an average day saw
more than 300,000 people opening A-share accounts.

These fresh investors were Wang's perfect targets to make a quick buck in
extra quick time. On December 25 last year, Wang opened his first QQ
(instant messaging) club to pass on tips to stock investors, but for a
fee: 3,000 yuan a year.

In the next several months, Wang set up 12 more QQ clubs, each with 100
to 120 members from more than 20 provinces and cities. Such was the
demand for tips that Wang more than doubled his fee, to 7,000 yuan.

A man surnamed Liu from Xiamen in East China's Fujian Province was among
Wang's first batch of members. "In the beginning, I did make some money
from the stocks that Wang suggested. But later, I lost a lot more because
of his wrong tips," he says. Liu had suffered enough loss and couldn't
take it any more. So he moved court against Wang, prompting police to
arrest him earlier last month.

Investors discuss market movements at a bourse in Beijing. The Shanghai
Composite Index has catapulted from 2715 on January 4 to above 4600.?

Wang's case is just the tip the iceberg, for there are hundreds of "Big
Brother Leader 777," in the country. One has to just log on to a
stock-trading website such as http://guba.eastmoney.com to see some of
the sensational advertisements promising 20 to 30 percent returns within
a week.

Business reporter Liu Qian says she often gets text messages asking her
to buy or sell a particular stock at a designated time. But she has never
trusted them. "How can strangers send you money - that too without any
reason?"

Though Wang's case has been an eye opener for some investors, there are
those who still refuse to see the writing on the wall. Wu Hua, of Ningbo
in East China's Zhejiang Province, still subscribes to a QQ club for
insider information, even though he knows everything about Wang.

"Information from our club is more reliable," Wu says with confidence. He
insists that "his" club is different from that of Wang's. "I've tried it
several times, and it really works. And the charge is reasonable."

Wu entered the stock market only in January, and "joined" the QQ club in
March on a friend's advice. He pays 300 yuan a month for the tips. And he
doesn't think "his" club is illegal. "It just makes money in exchange for
the information it supplies," he says.

What Wu and his likes don't know is that that under Articles 122 and 197
of the Securities Law, any institution or person conducting securities
business without a license is deemed illegal, says lawyer Lin Tezhi. "The
implementation of this rule, however, is not so easy, given the
covertness of such cases," the Jingtian Law firm professional says.

But the China Securities Regulatory Commission (CSRC) is determined to
straighten things out. In the first half of the year, the securities
watchdog received 1,638 complaints on various operations, says CSRC
spokesman Liu Xinhua. It has investigated 524 of them and detected 11
cases of unlicensed securities consulting firms on the Internet. Six of
those are suspected securities crimes and have been handed over to the
Public Security Bureau.

The Internet is the major source of all such illegal operations, Liu
Xinhua says. "The suspects are using websites, blogs and QQ to pass on
'tips' to investors and charging fees in the name of memberships,
training, services and/or consultancy."

Apart from monitoring and striking at illegal securities operations,
educating stock investors is also very important, Liu Xinhua says.

But experts don't see that as an easy job. The popularity of informal
fund managers is fuelled to some extent by too many newcomers to the
stock market, says a China-CITIC Securities analyst.

"Since the market has been bullish for a long time, many small investors
think they can make easy money by just buying any stock. What they don't
realize is that playing in stocks needs professional knowledge. Phoneys
have a field day because licensed analysts cannot meet the demand of new
investors," the analyst says.

The major sources of small investors' knowledge about stocks are
financial books, TV programs, blogs and seminars. "It's really difficult
to understand the complicated techniques and terms (of the stock market)
in a short time," says Li Qiang, an expert with a company. "And
suggestions on financial TV programs are usually very general. They can
hardly give us practical guidance."?

The situation can change only if investors change their mindset, says the
China-CITIC analyst.

An Everbright Bank report published recently shows the majority of
domestic investors lack professional knowledge. If that's the case, they
should either buy mutual funds or approach professional firms to manage
their wealth, says Gao Huiqing, an expert with the State Information
Center.

In fact, after the sudden, but temporary, slump in the stock market that
began on May 30, an increasing number of investors started opting for
mutual funds. "The value of my stocks shrunk by 40 percent in early June,
whereas my fund assets dropped only 16 percent," says Wang Juan, a
29-year-old college teacher. She now plans to put most of her investments
in open-ended funds.

The management fees that professional traders charge for funds is only
about 2 percent. Hence, they are gaining popularity among small
investors. For instance, subscriptions for a new fund launched by a joint
venture of Bank of Communications and Schroder on August 1 crossed 30
billion yuan, more than twice its expected target of 12 billion yuan.

Small investors can also choose wealth management products, which usually
involve lower risk compared even to mutual funds. Some products promise a
minimum return, too.

But the decision has to come from the new investors eager to make some
fast money.

(For more biz stories, please visit Industry Updates)

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Learn Mandarin online - Protectionism - the real threat to growth, stability

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BIZCHINA / Weekly Roundup

Protectionism - the real threat to growth, stability

By John Rutledge (China Daily)
Updated: 2007-08-03 13:54

The author Dr John Rutledge is a leading economist who has advised
several presidents, including the current administration, as well as
multinational corporations and financial institutions

At Nobelist Robert Mundell's recent Santa Columba Conference, the
assembled group of specialists in international finance agreed on two
points: 1) the global economy is growing faster than at any time in
history, and 2) the number one risk to sustained global growth is rising
protectionism in the United States.

This week in Washington, short-term politics won over long-term economics
and basic humanity when the Senate Banking Committee voted in favor of a
protectionist bill, joining a long list of bills aimed at China.

There is a race to the bottom among American politicians to determine who
will get the honor of leading the lynch mob that blames China for every
real or imagined economic ill. These political leaders are competing for
short-term political gain at the risk of the global growth that is
lifting billions of people out of poverty around the world. Worse still,
they know exactly what they are doing.

On Wednesday of this week, 1,028 economists signed a petition to members
of Congress, advising them of the immense benefits of free and open trade
in goods, services, and capital, and warning them of the grave risk to
growth and stability, both in and outside the US, from escalating
protectionist measures that could lead to a global trade war.

As one of the signers of the petition, I spoke on the issue at a press
conference on Capitol Hill organized by the Club for Growth, who ran the
signed petition as a full-page display in the Wall Street Journal. Let's
hope we had some effect on the policy makers.

Not coincidentally, 77 years ago, in May, 1930, 1,028 economists signed a
similar petition, which ran as a full page in the New York Times. They
were trying to convince Congress not to pass the Smoot-Hawley tariff
legislation. They failed. I am convinced the tariffs then were a major
contributor to the length and severity of the Great Depression that
followed.

Today's global economy is in great shape. Global economic growth in 2006
was an incredible 5.4 percent, compared with 2.9 percent during 1950-73,
when Europe and Japan were rebuilding their economies after the war, and
1.3 percent during the 1870-1913 industrial revolution. The IMF predicts
5 percent growth for both 2007 and 2008, which would mark the sixth
straight year of growth in excess of 4 percent. Developing Asia - the
epicenter of the world's economic growth explosion - will grow at nearly
twice that rate, led by the spectacular growth of China.

The US economy is in good shape too, with growth in excess of 3 percent,
contained inflation, profit growth of over 14 percent in the most recent
quarter, and long-term interest rates below 5 percent.

If things are so good, then why are voters demanding protectionism?

(For more biz stories, please visit Industry Updates)

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Tuesday, December 25, 2007

Chinesepod - China finds substandard Philippine dried banana pieces

? ?

BIZCHINA / Center

China finds substandard Philippine dried banana pieces

(Xinhua)
Updated: 2007-08-02 10:44

Imported Philippine food is for sale at a supermarket.?[newsphoto]

Chinese quarantine officials have seized two tons of dried banana pieces
imported from the Philippines found to contain excessive sulfur dioxide
levels.

The levels reached 1,286 milligrams per kilogram, nearly 25 times the
maximum stipulated by Chinese regulations on food additives, said General
Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ).

The 100 boxes of banana pieces, imported by Aixiu Food Co Ltd, a
Qingdao-based company, were valued at US$13,159. The goods had been
sealed, and quality authorities would return them to the export country
or destroy them in line with regulations.

The sulfur dioxide was the residue of sodium metabisulfite and potassium
metabisulfite, which were used as decolourants and preservatives in food
production.

Ingesting sulfur dioxide can cause queasiness and vomiting, and can be
carcinogenic in the long term.

China's quarantine sectors have discovered unqualified imported food from
the Philippines 13 times recently, including excessive cadmium in dried
sleeve-fish and octopus pieces, as well as salmonella in frozen whelks,
sources with the GAQSIQ said.

The GAQSIQ had informed the Philippine authorities of further measures on
the safety of food exports, said the sources.

Philippine quarantine officials claimed to have found formaldehyde in
China's "White Rabbit" milk candy, but they have not contacted or
provided relevant data to the GAQSIQ, which had tested the Shanghai-made
candy safe.

In the first half, more than 99 percent of the Chinese foods exported to
the United States, the European Union and Japan were up to standard,
according to the GAQSIQ.

"Food safety is a global issue which requires cooperation between
governments," said Li Changjiang, chief of GAQSIQ on Friday.

(For more biz stories, please visit Industry Updates)

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Learn mandarin - Central bank to tighten real estate credit

? ?

BIZCHINA / Center

Central bank to tighten real estate credit

By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-07-31 15:25

The central bank's Shanghai headquarters said last weekend it will
intensify supervision on credit flows of both real estate developers and
house buyers, the Beijing Times reported today.

This is the first time that the central bank has signaled potential risks
in housing loans.

Special coverage:
Housing in China

Related readings:
?More curbs possible for real estate
?Property prices up 7.1% in major cities
?Property investment up 28.5% in 1st half
?Real estate focus turns to secondary cities
?Owning a home 'the most important'

The tightening policy follows a policy signal sent by the Monetary Policy
Committee under the central bank, which said recently that the sound
monetary policy featuring a steady and moderate tightening should be
continued according to the current condition of the economy.

As a result, in the second half of this year, real estate developers are
expected to get fewer loans from lenders while some weaker developers
will lapse into capital crisis. The change in asset market could also
increase loan risk.

A report issued by Standard Chartered Bank also said that most Asian
economies, including China, are far away from severe excessive liquidity.
They are all tightening credit controls to curb inflation.

No matter what tightening measures are adopted, the cost to developers
will likely rise and speculation will be restrained.

(For more biz stories, please visit Industry Updates)

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Chinese language - 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

However, the residents questioned the
12 percent figure.?

"I have no idea about income rises," said an employee surnamed Lin, "My
salary, in fact, dropped, compared with the increase in commodity
prices." His salary is 3,000 yuan.?

The people enjoying rising salaries also feel nothing towards it.?

"In the past, three yuan's meat is enough for one dish, but now I need
pay five yuan." said Miss Ma. She said his pay rises were nothing
compared to the rising prices of consumer goods, although her salary rose
150 yuan per month.

"The living expenses per day are 10 yuan more, and reach 300 yuan per
month, so what would the additional 150 yuan do?" asked another employee
surnamed Ma.

Of 1,604 people interviewed, 64 percent said their salary rises could not
match the soaring economic development, according to a recent survey
conducted by the China Youth Daily.

According to the Shenzhen Statistics Bureau, the average disposable
income of residents rose 5 percent year-on-year to 22,600 yuan last year.
After deductions for inflation, the actual rise was only 2.7 percent,
compared with the 16.6 percent economic growth.

The figure for the first half of this year is slightly better: a rise of
6.4 percent. It is still lower than the 13.2 percent economic growth.

Statistics from the National Development and Reform Commission show
massive price hikes in grains, edible oils, housing, public utilities and
services last month. Only production material prices dropped in June.

(For more biz stories, please visit Industry Updates)

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Chinese language

Learn Mandarin online - Aviation: 1st private aircraft dealer open for business

? ?

BIZCHINA / Biz Media Digest

Aviation: 1st private aircraft dealer open for business

(Agencies/chinadaily.com.cn)
Updated: 2007-07-25 14:36

China's first showroom selling aircraft to private customers has opened
in an eastern city, Beijing Morning Post reported Tuesday, in the latest
sign of soaring incomes as the country's economy booms.

?
Two executive jets wait on the tarmac of Beijing Capital airport in 2000.
[AFP]

The Tianducheng General Aviation Marketing and Service Centre opened its
doors on Monday in the city of Hangzhou to reveal a range of helicopters
and small private and agricultural-use airplanes, the report said.

The store has been jointly set up by an aviation technology company from
the northern city of Xi'an and a Zhejiang business group.

Among the store's merchandise is a two-seater helicopter selling for the
equivalent of 160,000 dollars, the newspaper said, without specifying
whether the aircraft being sold were foreign or domestic made.

The number of private owners of aircraft is now "less than 100"
nationwide, the newspaper said, but the aircraft dealer in Zhejiang
province plans to capitalise on expected growing private sales as
personal incomes continue to skyrocket.

Although millions of rural residents survive on the equivalent of a few
dollars a day, the combined wealth of China's 400 richest people in 2006
jumped 51 percent to 110 billion dollars, Forbes magazine said last
November.

The number of dollar billionaires also increased to 15 from just three in
2004.

(For more biz stories, please visit Industry Updates)

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Monday, December 24, 2007

Chinesepod - Banks use only 26% of QDII quota in 1st half

? ?

BIZCHINA / Center

Banks use only 26% of QDII quota in 1st half

(Xinhua)
Updated: 2007-07-24 10:39

China's banks only used 26 percent of the 50-billion-yuan (US$6.61
billion) quota granted to qualified domestic institutional investors
(QDIIs), the China Banking Regulatory Commission (CBRC) said on Monday.

The CBRC said that it had approved 22 banks, both domestic and
foreign-funded, as QDIIs by the end of June but they took only 13 billion
yuan out of the total, including 10.5 billion yuan and US$336 million.

Special coverage:
Market Watch 
Related readings:
?New QDII measure takes effect
?ICBC raises $585m in China's largest QDII fund
?Insurers' securities investment rises 53%
?QDII expanded to include securities, fund companies

Institutional and individual investors prefer to keep hold of their yuan
instead of investing overseas because they expect the yuan to continue to
appreciate, experts explained.

"Despite an ordinary start, the QDIIs have great potential as they have
made the first step to representing their domestic clients in investing
overseas, including investing in Hong Kong's stock market," said Luo
Ping, a senior official with the CBRC.

QDIIs, one of China's efforts to ease the appreciation pressure on the
yuan and help reduce China's excessive liquidity, had been deterred from
overseas investment by China's rebounding stock markets, experts said.

(For more biz stories, please visit Industry Updates)

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Monday, December 31, 2007

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