China's auto market is in depression. It needs a new engine. Promotion of new models does not work. Policy may help.

Green light has been given to auto finance companies and rules of auto loans have been in place. More financial institutions are entitled to offer the service to auto buyers. But for buyers, the threshold of the service has got higher. And the terms of the loans are short. The biggest problem for lenders is the judegement of the credit status of a buyer. Foreign lenders are more experienced in coping with this situation. They make both phones and physical visits to an applicant to make sure that the information he or she provides is true. But we do not expect any remarkable turning point a short distance from here. New rules define auto loans more specifically

Prowess, not size, counts

Baosteel has a big, big dream and it is moving towards that. Undoubtedly the consolidation of its parent's company's steel-related assets in it will make it larger. But will it get stronger after the huge capital funding as Wuhan Steel did after its offering of new shares? It takes time to draw any conclusion about that.

The present situation is confusing enough for analysts, observers and investors to mull over. Some say it will serve a perfect example of slimming down state shares. But the way of its fund raising somewhat disappointed the market which plunged at the news of its new share issue. At least half of the new shares will go to Baosteel Group while at most half of the total will be offered to the public which had expected a placement to their advantages.Baosteel eyes giant of 500 mln tons production capacity by 2010

China's publication sector has not been open yet. But the process has begun in distribution and printing business. In fact, even before that, some Chinese businesses, including some small and medium sized printing companies, realized how fierce competition they would face. In China, the publication market is not open to private capital. There are many private book retailers which cooperate with state-owned publishers. This is good news for these private retailers as they will have more room to manoeuvre.

Foreign publications are very popular among Chinese readers. Copy trade booms in the market. Bertelsmann has a readers' association in China which sells best sellers to its members at discount. Though the varieties of its offer are not wide enough, the name of Bertelsmann spreads through the nation.

The Xinhua Bookstore, which occupies two-thirds of the market share, is seeking private and foreign fund to make it a joint-stock enterprise. Talks with possible partners, either private or foreign, are under way. It prefers foreign ones. Hong Kong listed Tom Group shows strong interest in joining hands with Xinhua Bookstore.

It is too early to say what impact will be brought by foreign investors. But surely it will make difference. In the short term, the influence will not be evident. And the openness of the publication sector is not on the agenda. China to open wholesale market of publications

The development of the semiconductor sector is one the top priorities on the agenda of the government. The settlement of the Sino-US disputes on chip disputes gives a boost to foreign investment influx in this sector. The market here is promising. The technologies hold by local Chinese chip makers are not the state-of-art. It is the massive returns and the competitive edge that justifies the China strategy of foreign capital. This will spur the further growth of the industry undoubtedly. But what about Chinese players? Are assembly lines are all that they want? Technology is of crucial importance to chip making. They can enjoy good returns now by using technologies developed by other countries. But it's not the way to have the business grow. Jiangsu clinches biggest wholly-owned foreign company

How about a benchmark?

The fixed asset investment in July rebounded according to the latest figures for the first seven month of the year by the National Bureau of Statistics.

The reason for this is not clear yet. This up trend may continue as the government stresses these days that one-suits-all policy is not what the macro-economic control is all about.

In this case, it is expected that sectors and businesses thought to be encouraged or immune from the tightening rein will make a round of investment spree. This will add to difficulties for the central bank to decide whether an interest rate hike is necessary.

Both the second and tertiary industries saw decline in investment. But rise took place in the first industry. Most of the projects are funded by local governments and enterprises.

The absence of a benchmark defining the full success of the macro-economic control also causes confusion. What's more, the sectors which are believed to be overheated have been identified. But those which should be propped up have not.

The most important and difficult thing to adjust such an enormous economy is to have voices and actions harmonized. This is especially true in the age of globalization in which the country's economy plays an increasingly significant role. Fixed asset investment grows 31.1 per cent

Padding along

Talks about insurance capital entering into the equity market has long been in town. The government knows very clearly the significance of this policy but is very cautious to give a nod. It must consider the risk. The insurance market is growing quickly in China but is not full-fledged. Any turbulence may cause big trouble. That's why the watchdog always takes steps which are slower and smaller than what was expected. Insurers allowed to use forex for overseas investment

China will launch corn futures in Dalian in September. Technical conditions are ready. Since 1990s, China has been a major corn importer and exporter in the international market. But the price of import is much higher than that of export. China yields 120 million tons of corn a year, the second largest in the world. 70 percent of the harvest is used as feedstuff. Corn prices fluctuate sharply as the country opens its grain market after its WTO membership. Voice for corn futures are strong. In the international futures market, corn contracts enjoy the longest history, largest scale and perfect operation. For the long run, Chinese corn will play leading role in corn pricing in the world market. Dalian bourse approved to launch corn futures

By People's Daily Online