An interest rate rise proposed by China's central bank? Absolutely groundless, said the central bank. And the prices of A-share market immediately rallied on this news. In fact, Mu Huaipeng, head of PBOC's research bureau, which was in the center of the rumor, said just a few days before the rumor that more time would be needed to closely watch the prices changes before any decision on interest rate changes can be made. Expectations on raising interest rates was especially high after Zhou Xiaochuan, Governor of PBOC, said interest rates should change with prices. But Zhou himself did stress at a banks' meeting just a few days before his bank clarified the rumor that the financial sector should be put under close watch and more consideration would be necessary on interest rate hike.Central bank denies interest-rate-rise rumor

Eight companies were listed in Shenzhen SME board on June 25. The bellwether is expected to be a leading laser equipment producer. The eight proved to be a great success beyond expection. Speculations varied before their launch. But the Shanghai and Shenzhen markets both were down on the eve of that over the concerns about capital exodus from the two main boards. The government expects small and medium sized enterprises, especially those in hi-tech industry and with great growth potential, to thrive. And the absorption of nutrient VC, including foreign VC like US, will undoubtedly help them grow up. China encourages development of SMEs, venture capital

Be more open and fairer to the rest of the world

A level play field will be ready for all businesses in China. The existing corporate bankruptcy law does not address insolvency of private and foreign-funded enterprises on one hand and the government was the de facto payer for bankrupt state-owned enterprises on the other. This will change soon. But before that, who will be the luck dogs to enjoy the bail-out from government--- the last chance for any money-losing Chinese SOEs? Corporate bankruptcy law draw submitted to legislature after 10- years preparation

Assets of China's insurance assets has topped 1 trillion yuan.In a seminar on China's insurance sector marching toward the world capital market, Wu Dingfu, Chairman of China Insurance Regulatory Commission, reaffirmed China's commitment to WTO to offer a level play field for Chinese and foreign insurers. He urged to give a full play to foreign insurance companies to upgrade China's insurance sector. He encourages Chinese insurers to finance and compete in the international market. He also stresses the importance of turning out insurance talents with international vision. He called for exchanges with foreign peers on insurance supervision.Assistance for nation's insurersNew rules allow insures to invest abroad

Be more open and fairer to China

USLabor Secretary Elaine Chao arrived in China on June 21. She singed four documents with China ranging from income and work security to job training. She toured to a job training center designed for rural women. Her visit coincided with that of Commerce Secretary Don Evans, who has high interest in China's northeast and deep concerns about the intellectual property rights protection and market access in China.

A large scale campaign against trade mark infringement will be launched by the State Administration of Industry and Commerce around the nation in the second half the year. And China is urging its enterprises to make more efforts on innovation. Both Evans and Chao met with Chinese Premier Wen Jiabao in Beijing during their visits. Evans does not think China is opening its market quickly enough. His Chinese counterpart Bo Xilai reiterated in their meeting his opinion that China is a market economy. But people who had expected progress on US recognition of China's market economy status during Evan's trip only found themselves disappointed. Evans willing to introduce US firms to HeilongjiangChinese Premier meets with US Commerce, Labor SecretariesBo: China deserves market economy status

The Ministry of Commerce of China has opened a website to offer information on trade remedy to help Chinese enterprises prevent and handle trade disputes with their foreign competitors. As Chinese products are increasingly popular and Chinese investors are developing mounting interest in foreign markets, have they felt them welcome there for their survival and growth? Tariffs remain major concern for China

European Union has surpassed Japan to be China's largest trading partner. Now it will help China to tackle trade-rated issues in the world trade. Mr. Erkki Liikanen, EU Commissioner for Enterprise and Information Society, spent a "very exciting evening" at Qiangguoluntan, or Strong China Forum of People's Daily Online. He discussed about technologies and policies for communication of next generation. He thinks it is the right time for China to develop its own 3G now. No more time should be wasted. China is considering deployment of its 3G standard, TD-SCDMA, in mid-2005. But EU declared on June 28 it would not extend the market economy status to China after its initial assessment.China, EU launch largest trade-related technical assistance project

Soybeans from Brazil will be let in after they are proved to be healthy and safe. It's nothing but a technical issue. Chinese President Hu Jintao has sent a message to his Brazilian counterpart to express his hopes for a settlement of the issue through friendly consultations between the two sides. China is the largest importer of Brazilian soybeans and Brazil is a leading soybean exporter second only to US in the world. It also eyes China's futures market with soybean exchanges one of the main business.China, Brazil reach understanding on soybean dispute

Optical fiber from US, Japan and ROK will be subject to longer investigation in China. China extends anti-dumping investigation on imported optical fiber

Regional cooperation

Chinese Premier Wen Jiabao confirmed again that China would have its economy soft-landed. It was in Qingdao, a coastal city in Shandong Province where top officials from 22 ACD (Asian Cooperation Dialogue) states gathered. As the only organization inclusive of the whole Asia, ACD has members either from energy hunger or from energy rich areas. And this is tune for Qingdao Initiative. The agenda of the last year is security. More important thing is that cooperation between Asian countries which are marching toward an integrated market will have a very clear, well-defined and rosy picture---proposed by China. Asian countries vow to make efforts to attain energy securityChinese Premier makes five proposals for promoting Asian cooperation

Regional economic integration means breakthrough of geographic barriers. This helps to curb local protectionism which hurts economy. Pan-Pearl River Delta is a good example. But it is out of expectation that the State Development and Reform Commission will not include this model of regional cooperation into its 11th five-year plan. Top on the agenda is the Yangtze River Delta and Bohai-Rim. The former is full-fledged and the latter has just taken a substantial step. On June 26, a framework protocol to push forward the Bohai-Rim regional economic integration was signed in Langfang, Hebei Province by the State Development and Reform Commission, Bo'ao Asian Forum Secretary-general Long Yongtu, and leaders from Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia, Shandong and Liaoning.

The meeting has decided to put a three-layered architecture into place for the cooperation in this region. For the first layer, a joint conference, chaired by heads of the seven provinces, municipalities and autonomous regions from this region in rotation, will be held once every year to discuss significant issues of the regional cooperation.

Regional economy to be on national strategy blueprint

Will subordinated bonds to improve banks'capital adequacy? Yes, it will, but not much. Analysts say it is because this capital is not regarded as core assets for banks.Green light to issue bonds

On land we grow grains, not only buildings

China's macro-control policy focus on two sides: money supply and land use. It will not be successful if either side fails. Much has been said about tightened money supply, including stringent access to bank loans and more bank reserves. In the front of the land protection, much has also been done and achieved. Cases of land abuses have been and will be exposed. People are held responsible. Reform will be launched in local land and resources administrations. Land is transferred through bidding, listing and auctioning. Beijing, the capital city cancelled some golf courses projects which would have covered a big area. Farmers have their land recovered and are producing more grain to feed the country. But there is still a long way to go. China's farmland dwindles by 6m. ha in 7 yearsChina clears development zones to make way for grain productionLand kept safe by macro-controlRegional economy to be on national strategy blueprint

By People's Daily Online