Biz Weekly Highlights: Overseas investors: immune from cooling?

Foreign investment keeps flowing into China at a "moderate and suitable rate". China is listed as the most attractive destination for global investment in a recent report of UN Trade and Development Organization.

If you study the latest report of National Statistics Bureau, you will find there is some, but not much impact of China's macro-control policy on foreign-funded enterprises. For example, foreign-invested businesses scored the most robust growth and a slight decline of the speed of the growth in added value of industrial production for May and the first five months of the year .

In the domestic market, catering sector led sales increase. Chain restaurants funded by investors from Hong Kong, Taiwan, Macao and foreign countries generated nearly half of the total operating revenues in this industry.

Foreign capital remains good appetite even for some sectors which are regarded as overheating. ING from Netherlands and Singapore-based Capital Land will double their stakes in China. Morgan Stanly's real estate arm has ambitious plans for Shanghai and the whole Chinese market at large. Steel giants like Blue Scope Steel, Hamersley, Nippon Steel, and Arcelor have all strengthened their presence in China. A production line for galvanized steel sheets was put into operation in Dalian last week as a result of cooperation between Thyssenkrupp and Anshan Steel.

Foreign capital is active and welcome in resources exploration. China's west region is rich in mineral resources. Exploration in China is mainly conducted between 300 meters and 500 meters underground, according to Ministry of Land and Resources. Foreign input to grow despite cooler stepsChina's foreign investment increases steadily

Rushing in
China is growing to be both buyer and components supplier of advanced planes in the world. China Eastern Airline will buy 20 Airbus A330 to replace it's A-300 planes. Airbus vows to place bigger order in China. China will help to build the world's largest passenger plane, A380 and the world's next generation plane,Boeing 7E7. It will also have its sky more open to US airlines. Additional 10 carriers will have flights between China and US by 2010.Chinese to help build largest aeroplaneChina, US reach deal to expand aviation services

Two Maybachs and an Arnage were sold out in the 8th Beijing International Car Show. Cadillac will challenge Benz and BMW in China market. Dong Feng debuted its hi-end sedan Tianlai in the exhibition. Toyota will open six outlets for its Lexus in Beijing, Shanghai, Guangzhou and Shenzhen. Shanghai Volkswagen and FAW cut prices of all their lines ranging from 3000 yuan to 10,000 yuan on June 16. Before that, General Motors declared its plan to double its production in China with an investment of 3 billion USD in the next 3 years. Competition between the two arch rivals are heating up.

During the Beijing auto show, all foreign auto makers, such as Daimler-Chrysler, Hyundai, Mazda, etc., not only showcased their new models, but also their ambitious vision for their China market strategies. The show enjoys growing popularity and significance. But potential Chinese car buyers are still holding a wait-and-see attitude. In May, China's car inventory topped 100, 000 units.Volkswagen sets China as Asian export baseLuxury cars target China's new rich Auto China 2004 ends with record turnout

Fund investment is quite popular in China. Even the grey population come to learn it and invest in it. Shenzhen-based Yinhua Fund Management Co., Ltd. will release its third open-ended index fund. It is the first based on Dow Jones China 88. China's first Dow-Jones-index-based fund to be issued

China will have its first specialized pension firm. Shanghai-based Taiping Life Insurance will be the controlling shareholder of Taiping Pension Co., Ltd. This marks a breakthrough of China's pension management. The company will launch full services to corporate businesses under the cooperation with commercial banks. Pension firm ready to enter market

Scared away?
Within China, where is the best destination for foreign capital? Beijing, Shanghai and some coastal areas have long been very attractive. But analysts are now asking how long this will last as energy shortage is especially severe in these areas. When the memory of blackouts is still fresh for residents and businesses in these cities, a peak season for power consumption seems to have arrived even earlier this year. An energy saving campaign has been launched in big cities like Beijing and Shanghai.

Every coin has two sides. The problem for these areas is opportunity for western areas where energy supply is sufficient, as well as for foreign energy investors. But foreign enterprises are hesitating about moving westward as more power plants have already been under construction. In addition, foreign investors will be very cautious about cashing in on China's power market as they don't think the policy in this sector is transparent enough. Will power crunch upset global investors?

A-share market in the mainland is in depression these days mainly due to the concerns about interest rates hike. But some analysts are questioning about whether that interest rates hike is around the corner, or the pessimism in the stock market is just a backlash of investors.

The central government thinks the macro-control measures have take effect. Chinese Premier Wen Jiabao is confident about the country's economic situation now. Zhou Xiaochuan, Governor of China's central bank, agreed that the tightening moves have produced "initial results". He also vowed to closely watch the financial sector. Another official with the central bank also echoed that decisions on interest rates hike would be subject to further observation of prices changes. Premier Wen: Economy on healthy trackFinancial sector under scrutiny

Our partnership
Confidence has been built up between China and its three partners in central and eastern Europe, Poland, Hungary, and Romania, which were among the first countries to recognize People's Republic of China more than fifty years ago and became EU new members in May. Economic cooperation between China and these countries will widen and deepen.

Tashkent Summit marks that Shanghai Cooperation Organization has completed its years' founding period and entered into a new era of comprehensive development. Kyrgyzstan, a member of Shanghai Cooperation Organization, becomes the fourth country recognizing China's full market economy status. In the declaration issued during the Tashkent Summit, SCO pledges to devise measures to guide the implementation of multi-lateral trade and economic cooperation before premiers of SCO states gather in Bishkek in fall this year. A system will be in place to facilitate the free flow of goods, capital, services and technologies to boost the trade among the member countries. Steps should be taken to put a development foundation and a committee for industrialists in place. FM: President Hu's 4-nation trip fruitful

The price tags of bedroom furniture
A ruling of US Department of Commerce will triple the prices of Chinese wooded bedroom furniture. Before that, China's shopping bags were also ruled dumping. Actually, Long Yongtu, Chinese chief negotiator in the country's WTO accession long haul, said recently that China's status of market economy does not have to be recognized by other countries. He holds that articles on anti-dumping in China's WTO document are designed to target at some "enterprises, not the whole country". " What will the rise of China's economy mean to the whole world, boon or ruin, threat or opportunity, depends on whether interests can be shared on an equal basis," declared Long. US to slap tariffs on Chinese furniture

ROI: Returns on improvement
The Industrial and Commercial Bank of China has been recognized as the best commercial bank in the mainland by Asiamoney magazine. It is making great efforts on improving its performance. All China's biggest four commercial banks are trying to reduce their non-performing loans. China's largest commercial bank's non-performing assets ratio down to 14.9 percent

For foreign enterprises, cleaner production means less costs of production. It is opposite for Chinese enterprises. The reason is they do not have the access to the technologies and the old practice of "treatment after pollution" really added their costs. The State Environmental Protection Agency, with the help of Dow chemical, will teach them what economic benefits they can get from cleaner production. SEPA

to conduct cleaner production experiment

By People's Daily Online



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