Special Report Chinese Opportunity for Outbound Investment?

The Export-Import Bank of China: Want to Be the Best in A Better World ?

Special report Chinese Opportunity for Outbound Investment?

Sun Bingzhong Chairman of Wuxi May. 2009/Issue 10 Sunmart Holdings Pte Ltd.

邮发代号：80-799

China's Foreign Trade 国内刊号：CN11-1020/F 国际刊号：ISSN0009-4498 Jiangxi Changhe Motors Co.,Ltd.

I. The introduction of Changhe Motors Established on Nov. 26, 1999, Jiangxi Changhe Motors Co.,Ltd. is located in Jingdezhen, Jiangxi province, the famous city of China. It was sanctioned by National Economic and Trade Committee, Changhe Air- craft Industries Group is the main sponsor. Jiangxi Changhe Motors Co., Ltd. (Changhe Motors) is one of the leading motor manufacturers, and the R&D and production base of small emission autos. The first microbus of China was manufactured here. Changhe Motors has 6000 employees, with the registered capital of RMB 410 million. It has three bases of finished car manufacturing, including Jingdezhen, Jiujiang and Hefei, one engine manufacturing base in Jiujiang, and a industrial park of auto parts production. With a production pattern of crossing over two provinces and three cities, the company has developed an annual production capacity of 300,000 finished cars and 150,000 auto engines. The company covers a wide business range of the series of mini cars, the design, development, manufacture, sales, aftersales services for economic vehicles, and the development, consultation and services of the relevant projects. The company adheres to the concept of “Striving for the mission of letting cars drive into the average families”. The company is devoted to the mission of boosting China’s auto industry, making great contribu- tions to the clients, shareholders and the society with the highest quality. The government leaders have shown great concerns to Changhe Motor’s development. Jiang Zemin, Li Peng, Wu Bangguo, Zeng Qinghong, Wu Guanzheng, Hui Liangyu, and some other national leaders, have visited the company, and given high praise to it. II. The main products By adhering to the concept of safety, environmental protection, and energy saving, Changhe Motors has kept developing new family cars. Since 1982, when the company produced the first mini lorry, up to now,

62 it has developed and introduced in new products to meet the market demand. It has produced mini lorries, mini buses, mini asloon cars, middle level saloon cars, etc. It has developed five platforms, and 8 major systems of a hundred kinds of vehicles, which are smoothly sold across the country. The first generation of leading products was named series of CH1010, which took quite considerable market shares in the domestic mini car market. It has made quite a good foundation for the development of the company. Former Premier Li Peng gave it a pretty name “locust”. The products of the second generation was called series of CH1018 system, with a development rate of over 40%, marking the most splendid period of the company, the sales and production have topped the domestic car industry for many consecutive years. The products of the third generation are named “Charles’s Wain” and “Ideal”.

Jiangxi Changhe Automobile Co., Ltd. Add: No.208 Xinchangdong Road, Jing- dezhen, Jiangxi 333002, P.R.China Contact Person: Zhou Zhenguang Tel: 86-798-8462884 Fax: 86-798-8462987 E-mail: [email protected] Web Site: www.changheauto.com

63 Lifestyle The Northern Life ~ Finnish Art and Design

Duration: April 25- June 25, 2009 Venue: Medium Art Centre, Haidian District, Beijing, China All 18 Northern Life Artists are from Oulu area, Finland. They are: Visual art: Sakari Matinlauri, Moosa Myllykangas, Lauri Rankka, Anni Rapinoja, Riikka Soininen, Veikko Törmänen and Petri Yrjölä. Photography: Anni Kinnunen, Antti Laitinen and Vesa Ranta. Design: Sirpa Kivilompolo, Päivi Mikola, Kimmo Nissinen ja Satu Pisilä. Anssi Lassila Anni Rapinoja Veikko Törmänen Architecture: Ari Järvinen, Antti Lassila, Jukka Laurila and Kärsämäen Kirkko warmshoes-2-2009 Irtoaminen Lauri Louekari.

The a practicing architect, running his own office since 1980 with his Sirpa Kivilompolo ~ wife, architect Anna Louekari. Their work has been published in a Paperivalo studio in the serenity of number of foreign books and journals. Louekari’s scholarly work Lapland is where unique luminaires, has been covered in both domestic and international publications. cinerary urns and watermark paper cards take shape. I use natural fibres Architect, PhD, born 1952 and ecological methods to make pa- http://www.louekariarkkitehdit.com/ per by hand. Using watermarks to decorate paper gives me a chance to realise my dream of combining light Moosa Myllykangas ~ I mainly use diverse junk ma- and paper. As handmade white paper terials in my works incorporating copper thread, steel thread and already is expressive itself, the play of line. Last two years I have light and shadow as well as subtle dif- work on acrylic and gold foil. ferences in shades create an illusion I have noticed that the materi- that catches attention. als seek their way to me. The watermark is a miracle hidden in a sheet of handmade Many materials found by paper and revealed by the light into stories and transparent images. chance bring up me memory Paperartist, designer, born 1959 http://www.paperivalo.fi/ about events during life and eventually those events shape up to a piece of art. The sig- Jukka Laurila nificance of the work is very important for me but I try to Architect, born 1949 leave things open also for the Half of the designs of my viewer so that everybody can studio have been renovating the create their own story around old and the other half designing the work. I hope that the mes- the new including single fam- sage of the artwork becomes ily houses, villas, multi storey the essential point. buildings, office buildings and small public buildings etc. Us- Visual Artist, born 1960 ing wood and wide range of it's http://www.moosamyllykangas.net/ surface finishings has become an essential element of architecture of these buildings. Finnish Päivi Mikola ~ In my people have a strong history on work I try to follow the star of using wood as a construction material. Wood is an ecological simplycity,not forgetting warm material and especially important for me. When used in the right human touch. way it can carry Finland's strong tradition of forests to collabo- rate even with steel, concrete and glass. In design I find the val- ues of ergonomy, ecology, economy, ethics and esthetics Lauri Louekari ~ Lauri equally important – they are Louekari is an architect and Doc- all complementary parts in a tor of Technology teaching at the successful design project. University of Oulu’s Laboratory And, in design for every of Contemporary Architecture. day life, the Nature materials, Louekari’s doctoral research dealt like wood, are the best companionship. with the analogical spatial relations When everything goes together and functions, in an easy simple between architecture and nature, way,forming a complete whole – then the thing is most beautiful. and included a significant design Seeing it happen - I am happy. component. Louekari has worked as Interior Architect, born 1949 http://www.colmio.com/ Lifestyle

ANNI KINNUNEN ~ I’m interested in time in a picture- how a moment constitutes. How aphotograph is in endless motion, thougha picture originates from a moment.In my photographs time stops. Places, that I use in my pictures are empty ordeserted. Usually I float in the air and I’m free from reality The floating reflects an interval: I feel I’m always between two things - never ready.” Photographer, born 1978 http://www.annikinnunen.com/

LALAN Shanghai, Shanghai Art Museum, may 2009 Lalan, a woman artist of China from early days LaLan went to Paris with her first husband Zao Wou- Ki to study music and dance in 1948, and started to paint in the end of 1950’s. She incorporates many elements from music and dance into her painting and forms a special style of abstract painting. Her work manifests both the influence of French abstract painting in 1950’s and 1960’s and that of oriental culture. In her painting, there is the dynamic beat and rhythm of the author’s gestures as well as the serenity and lasting appeal which is typical of Chinese classic painting. As a China’s woman artist of early period, Lalan is of some representative importance in the history of China’s abstract painting with the modernity of her painting. Xiao Xiao Lan, the Director of the Academic and Re- search Dept. of SAM is the curator of this exhibition and in charge of the editing of the accompanying catalogue. The exhibits of over 80pcs will be provided by the French collector Mr. Beurdeley and the family of Lalan. Mr. Beurdely will donate two of Lalan’s work to SAM as her permanent collection. After SAM, this show will later tour in the Museum of China Academy of Art, based in Hangzhou, Macau Museum of Art and Taiwan Museum of Art. Prague Biennale 4 China Section ARTISTS: Cui Jie, Li Chao, Li Qing, Li Wei, Qin Chong, Qin Qi, Tu Hongtao, Wang Guangle, Wang Yabin, Wang Yaqiang, Xue Jun, Ye Yongqing Curated by Cecilia Freschini Opening: May 14th-15th-16th (Thursday, Friday, Saturday) 2009 Dates: May 14 - July 26 Venue: Karlin Hall, Prague, Czech Republic Presented by Prague Biennale Foundation, Iberia Center for Contemporary Art, International Art and Culture Foundation of Spain (IAC) PRAGUEBIENNALE is already in its forth year. Having established itself as one of the most dynamic and interesting Biennale all around the world. This internationally acclaimed biennale in Czech Republic has become the international reference point, especially with regards to painting. PRAGUEBIENNALE 4 (May 14 - July 26) is the biggest show focusing on young painting all around the world. PRAGUEBIENNALE 4 , as usually will present EXPANDED PAINTING, as the main project in the Biennal program. This is the hugest selection of the today young artists never been shown during an art biennale. Expanded Painting is dedicated to painting from all over the world with all its diverse connotations and in all its diverse conjugations. This year PRAGUEBIENNALE is proud to present the new section: “China Box”, contemporary painting from China. The curator Cecilia Freschini has introduced to this edition new contemporary paintings by twelve artists from China. The project is entitled “China box”, which is a symbol of Chinese philosophy, wisdom and creativity. “China box” is a show that com- municates to the audience how an independent curator beholds and understands Chinese contemporary painting today: “‘China box’ is China. ‘China box’ is the basement of the social, economic and artistic structure. ‘China box’ is the weft, a de- sires’ pix in which are hedged in ideals, thoughts and cultural creativity. ‘China box’ is the answer.” Lifestyle on stage inside the castle Florimund finds Aurora and awakens her with a Thumbelina by St. Petersburg State Chil- kiss. Florimund declares his love for Aurora and the king and queen dren’s Ballet give their blessing for their marriage. Time: May 29, Friday Venue: Mei Lanfang Grand Theatre Act III Price: RMB 80/180/280/380/580 The palace must be prepared for the wedding. The dust of the Ticket Package: RMB 600/1000 ages must be cleaned, and a wedding dress must be made for Au- Address: 32 Ping’anli Xidajie, Xicheng District, Beijing rora. The Fairies return for the celebration along with the fairy tale Performed by St. Petersburg State Children’s Ballet characters of the Bluebird and Princess Florine, Puss in Boots and Tickets are available at 86-10-64177845 the White Cat. Everyone joins in a dance of celebration. Finally Plot summary Florimund and Princess Aurora are married and receive the blessing of the Lilac Fairy. When the story opens, a woman receives a magic seed from a crone. Once planted, a tiny girl emerges from its flower. The woman names the child Thumbelina. One night, Thumbelina is asleep The Legend of Magic in her walnut-shell cradle and is carried off by a toad who wants the Time: May 30- June 1, 2009 miniature girl as a daughter-in-law. Thumbelina escapes the toad Venue: Chang An Theater and her son, and drifts on a lily pad until becoming the captive of a Price: RMB 100/180/280 beetle. The beetle discards her when his friends reject her company. /380/500 Thumbelina tries to protect herself from the elements but when Ticket Package: RMB 500 winter comes she is in desperate straits. She is finally given shelter /700/760/980 by a field mouse and tends the mouse’s home in return. The mouse Add: 7 Jianguomennei Dajie, suggests Thumbelina marry her neighbor, a mole. Thumbelina finds Dongcheng District, Beijing the prospect of being married to a mole unattractive and escapes the Tickets are available at 86-10- situation by fleeing to a far land with a swallow she nursed back to 64177845 health during the winter. In a field of flowers, Thumbelina meets a Diversified magic tricks in- fairy prince just her size and they wed. Thumbelina receives a pair clude “The Wonderful Magic Box”, of wings to accompany her husband on his travels from flower to “Four Thousand Years of Legend”, flower. “Legend of Egypt”, “Magic Crys- tal”, “Dream of a Maid”, “Night of Shanghai”, “Sword Through the Neck”, “Escape”, “Night of Northern Europe” and “The Bed Sleeping Beauty by St. Petersburg State of Death” will bring you to a world of illusions. A captivating and Children’s Ballet breathtaking experience not to be missed! Time: 2009/5/30 Venue: Mei Lanfang Grand Theatre Price: RMB 80/180/280/380/580 International Clowns Carnival 2009 Time: May 30- June 1, 2009 Ticket Package: RMB 600/1000 Venue: Poly Theatre Performed by St. Petersburg State Children’s Ballet Troupe Price: 80/120/180/280/380 Address: 32 Ping’anli Xidajie, Xicheng District, Beijing Address: Poly Plaza, 14 Dongzhimen Nandajie, Beijing Tickets are available at 86-10-64177845 Tickets are available at 86-10-64177845 Act I I bet your laughing this children’s day is more crazy than ever, because, the international clowns are coming! Look out, or It is Aurora’s resist laughing so hard that soymilk squirts out of your nose as birthday. The pal- clowns will take over the stage from May.30 to June.1 in the Poly ace gardens are theatre. The grotesque facial appearances, the bizarre costume, decorated and the the exaggerated movement, and the magic show that all make celebrations begin. you feel fantastic. Come, bringing with your family, and join the Aurora receives clowns and learn their performing arts. four suitors who honor her with gifts of roses. During Mayday Show Girl Party the festivities Au- Time: May 1-May 30, 2009 rora clutches Cara- Venue: Renaissance Beijing Capital Hotel bosse’s flowers, pricks her finger and faints away. Carabosse reveals Price: RMB 200 herself in triumph and vanishes. The Lilac Fairy returns to fulfill Ticket Package: RMB 500 her promise. Aurora is carried inside the palace where she and the Add: 61 Dongsanhuan Middle Road, Chaoyang District, Bei- court will sleep until the arrival of the prince. jing, China Tickets are available at 86-10-64177845 Act II Put on your dressage to join the highest mayday show girl One hundred years later, Prince Florimund is out hunting with theme parties. Hot Hip, Mini Skirt, Net night for wire; charming some companions. There in the forest he sees a vision of the most eyes, beautiful trends, so many themes will turn round in Renais- beautiful woman he has ever imagined; it is Aurora. Florimund sance Beijing Capital Hotel. Liyanlong who is recommended by dances with Aurora and falls instantly in love. When the vision famous music manager Yaoqian, Dream China singer Lianjie will disappears Florimund pleads with the Lilac Fairy to take him to show you a pop, jazz, vision feast. That’s just in mayday, every Sat- Aurora. Florimund discovers the overgrown castle, but must first do urday night, Show Girl Party will detonate an only top experience battle with Carabosse, who would prevent him from entering. Once with fashion mainstream media. Lifestyle Screen Let’s play music To celebrate the opening of music festivals season, French Cultural Centre invites you to discover a selection of movies focused on music. French films with Chinese (and sometimes English) subtitles Price: RMB 20 (Students RMB 10) 18 Gongti Xilu, Chaoyang District, Beijing Tel: 86-10-65532627 www.ccfpekin.org/cinema

Maunier Changement d’adresse Mathieu becomes the supervisor at a board- France, 2006, 85’ ing school that rehabilitates troublesome little Comedy – Director: Emmanuel boys. Through the power of song, Clement Mouret strives to transform the students. Friday 6/19 – 7:30 pm Sunday 6 /21 – 5:00 pm With: Emmanuel Mouret, Frédérique Saturday 6/27 – 7:30 pm Sunday 6/28 – 3:00 pm Bel, Fanny Valette David, a shy, awkward musician who has just moved to Paris, falls madly in love with his young student, Julia. Melo Wednesday 6/3 – 7:30 pm Sunday 6/7 – 5:00 pm France, 1986 , 110’ Friday 6/12 – 5:00 pm Sunday 6/14 – 7:30 pm Drama – Director : Alain Resnais Saturday6/20 – 5:00 pm Monday 6/22 – 7:30 pm With: Sabine Azéma, Fanny Ardant, Pierre Arditi A concert violinist meets and falls in You and Me love with a stylish young flapper who’s the France, 2005, 90’ wife of an old friend. Romaine instigates Comedy – Director: Julie Lopes the affair with Marcel, and carries it for- – Curval ward even when her hus With: Julie Depardieu, Marion Friday 6/19 – 5:00 pm Sunday 6 /21 – 7:30 pm Cotillard, Jonathan Zaccai, Tomer Friday 6/26 – 5:00 pm Sunday 6/28 – 5:00 pm Sisley Monday 6/29 – 7:30 pm band Pierre, falls ill. Sisters Ariane and Lena both have beaus, but new men are piquing their interest. Lena is in love with Francois, Diva but has met Mark,a talented violinist, who tries to sweep her off her feet. France, 1981, 117’ Ariane’s been dating Farid for two years, but he won’t commit, Drama – Director: Jean- and she finds the charms of a Spanish construction worker hard Jacques Beineix to resist. With: Wilhelmenia Wiggins Saturday 6/6 – 7:30 pm Monday 6/8 – 7:30 pm Fernandez, Frédéric Andrei, Rich- Sunday 6/14 – 3:00 pm Saturday 6/20 – 7:30 pm ard Bohringer Saturday 6/27 – 5:00 pm Sunday 6/28 – 7:30 pm A young French man is a peaceful postal worker, whose main passion is listening to an Ameri- U can diva, who refuses to record her songs. One day the young man France, 2006, 75’ secretly records her concert, but by Animation – Director: Serge Elis- some confusion ends up with the salde wrong tape. Mona is a princess but lives a life of Monday 6/1 – 7:30 pm Sunday 6/7 – 7:30 pm misery, mistreated by an odious pair of Wednesday 6/10 – 7:30 pm Monday 6/15 – 7:30 pm rats. But one day an adorable little unicorn Sunday 6/21 – 3:00 pm U appears and declares that she is there to help her through life and to assure her happiness. In the surrounding woods they The page turner meet Lazare’s family, the Wewes, a family of musicians living in a tree. France, 2006, 85’ Friday 6/5 – 5:00 pm Saturday 6/6 – 5:00 pm Drama – Director: Denis Dercourt Sunday 6/7 – 3:00 pm Sunday 6/14 – 5:00 pm With: Catherine Frot, Déborah Fran- Saturday 6/20 –3:00 pm Wednesday 6/24 – 7:30 pm çois Saturday 6/27 – 3:00 pm Melanie, the young daughter of a butcher is a gifted pianist. Her parents put her forward to study at the famous The Choir Conservatory, but Melanie is distracted during the entrance exam due to a rude France, 2004, 95’ juror and fails. Drama – Director: Cristophe Barratier Saturday 6/6 – 3:00 pm Friday 6/12 – 7:30 pm With: Gérard Jugnot, François Berléand, Jean-Baptiste Wednesday 6/17 – 7:30 pm Friday 6/26 – 7:30 pm 2009 No.10/455

BI-WEEKly WATCH 24 8 Figure 9 Agriculture 10 Auto 11 Steel Overseas enterprises involved 12 Chemical 13 Textile in manufacturing is their Chinese peers’ 14 Light Industry 15 Electronics first choice on the road to the outside 16 Transportation 17 Environment world, followed 18 Investment 19 Finance by trade, and natural resources 20 Culture 21 Health exploitation, transportation and processing. And this Special report preference rank will remain the same for 24 Chinese Opportunity for Outbound Investment? quite some time in 25 Wang Chao: Vast Opportunities for “Going-out” future. Enterprises 26 Figures from State Administration of Foreign Exchange 27 Suggestion from NRDC for China Overseas Investment 28 Tax Policies and the “Going-out” Strategy 29 Hong Kong-Ideal Access For Mainland Enterprises 31 Giant Hugs in Bad Times 32 Duesseldorf: An Attractive City for Investments in Germany

CITY

Together with its mild climate, making it an available 34 Suzhou, Paradise on Earth 34 destination all year round, fertile landscape and abundance of produce, it is no wonder that Suzhou is called “paradise on INVESTMENT INFO earth”. 38 Investment Projects in Western CHINA 56 Policy 40 How to Deal with the Profits of State-owned It is significant in maintaining Companies? China-Japan high-level 42 Positive Effects From Shrinking Investment dialogue as well as in building Research trust between the leaders of 44 CHINA’S BANKING REFORM in Progress (Part II) the two countries and enhancing cooperation. Fairs & Expos 48 China Fairs & Expos

World Expo 52 Expo Countdown Kicks off ccpit

54 CCPIT Meet with Delegation from Sino-Britain Trade Administrated by(主管) Association CCPIT(中国国际贸易促进委员会)

54 China-Spain Investment & Trade Seminar Held in Sponsored by(主办) Barcelona CCPIT Media and Press Center 中国国际贸易促进委员会宣传出版中心 GLOBAL 社长 President 杨晓东 Yang Xiaodong 55 Navigating the Changing Economy 总编辑 Editor-in-Chief 王晓同 Wang Xiaotong 56 Japanese PM Taro Aso Visited Beijing 副社长 Vice President 石净 Shi Jing 57 EU-China Focus on Economic and Trade High-Level 编辑部副主任杨蔚 Mechanism Editorial Deputy Director Yang Wei 编辑部 Editorial Department 郭艳 Guo Yan Tel:86-10-68053271 臧可佳 Zang Kejia UPdate 郭丽琴 Guo Liqin 李振 Li Zhen 58 April, Another Recovering Month for Im/Ex 英文校审 English Polisher 泰瑞·克兰丹农(美) TY Clendenen

CHINESE tIPS 经营部总经理石净（兼） Marketing Department Director Shi Jing 60 Business Dispute 副总经理白义峰 Bai Yifeng Deputy Director 惠飞 Hui Fei 项目经理 Manager 石林峰 Shi Linfeng Feature Tel:86-10-88075934 游万龙 You Wanlong 88075494 李小冬 Li Xiaodong 61 Being A Chinese, Behave Patriotic even Overseas 丁秋珍 Ding Qiuzhen 高嵩 Gao Song

Cover story 通联发行部总经理李英宏 62 Interview with Sun Bingzhong, and His Sunmart Distribution Department Director Li Yinghong 项目经理 Manager 张越 Zhang Yue 64 A Decade Miracle: Wuxi Sunmart Tel:86-10-88075342 余涛 Yu Tao 王石 Wang Shi Rule 66 Measures of the General Administration of Customs 理事会副秘书长兼秘书处主任杨复强 Council Secretariat Director Yang Fuqiang of the People’s Republic of China for Implementing 联络专员 Assistant 刘晓东 Liu Xiaodong Tel:86-10-88075380 宋华峰 Song Huafeng the Regulations of the People’s Republic of China on 戚英杰 Qi Yingjie 石林 Shi Lin Customs Protection of Intellectual Property Rights General Distributor For Overseas Subscribers 国外发行总代理 China National Publications Import & Export(Group) Corporation Index of Advertisement 中国图书进出口(集团)总公司 Add: 16, Gongti East Road Beijing, China Post Code:100020 江西昌河汽车股份有限公司地址：北京市朝阳区工体东路16号 Jiangxi Changhe Motors Co.,Ltd Tel: 86-10-65066688-8822 65063082 China International Book Trading Corporation 贵州茅台酒股份有限公司中国国际图书贸易总公司(GUOJISHUDIAN) China Dweichow Moutai Distillery Co.,Ltd Add: Box 399, Beijing 100044, China 国际投资促进网地址：中国北京399号信箱(100044) www.sino-investment.org 邮发代号 80-799 国内统一连续出版物号 CN11-1020/F 2009 中国（青海）国际清真食品就用品展及国际标准刊号 ISSN0009-4498 The 2009 China (Qinghai) International Halal Food and Products Fair AD LICENCE No. JXGS/G-0249

东北亚投资贸易博览会广告经营许可证号京西工商广字第0465号 The Fifth China Jilin·Northeast Asia Investment and Domestic Price 国内订价 16元(RMB) Trade Expo Overseas Price 国外订价 US$5 设计制作北京锋尚制版有限公司印刷北京瑞禾彩色印刷有限公司 Cooperation Media 常年法律顾问北京市天银律师事务所

www.KanKan.cn License Mark of General Administration of Press and Publication, the People’s Republic of China China’s retail sales: 9% ↑ during May Day holiday

Bank of China net profit: China’s retail sales climbed 9 percent from a year ago to about RMB 12 ↓ billion (US$1.76 billion) during the three-day May Day holiday, the Ministry of 14.41% Q 1 Commerce said. Bank of China, the country’s third larg- The estimate was based on sales from May 1 to May 3 at 1,000 major do- est lender by market value, said on April 28 its mestic retailers monitored by the ministry. The ministry said robust sales were first-quarter net profit fell 14.41 percent from a reported for gold, jewelry, home appliances and autos, as retailers launched pro- year ago on write-downs of sub-prime-related motion campaigns. assets. Sales of gold and other jewelry rose 19.6 percent, the ministry said, without Net profit in the first three months stood giving specific figures. However, it said the Beijing Caishikou Department Store, at RMB 18.57 billion (US$2.73 billion), or a major gold retailer in the capital, saw its sales nearly double to RMB 14.3 mil- RMB 0.07 per share, down from RMB 21.7 lion on May 1 alone. billion, or RMB 0.09, a year earlier. Sales of appliances, such as LCD TVs, air conditioners, refrigerators and lap- The bank wrote down the value of sub- tops, increased 11.4 percent, while those of automobiles grew 9.2 percent. (Xinhua) prime-related assets and other securities by US$378 million in the first three months, bringing the funds set aside for toxic assets up to US$4.84 billion, the bank said in its first- China’s registered urban jobless rate: 4.3% quarter report. in Q1 The bank still held RMB 2.2 billion in U.S. sub-prime-mortgage investments, US$1.05 billion in securities backed by Alt-A From January to March, 2.68 million people joined the workforce in cities home loans, US$3.2 billion of “non-agency” and towns across the country, which is 29 percent of this year’s target of 9 million mortgage investments and US$3.4 billion of people, and the registered urban unemployment rate was 4.3 percent, lower than Freddie Mac and Fannie Mae securities, as of the 4.6 percent target for this year. March 31. The employment and re-employment situation remained basically stable in Non-agency mortgage refers to mortgage- the first quarter, said Yin Chengji, a spokesperson for the Ministry of Human Re- backed securities not issued by government sources and Social Security. sponsored enterprises (GSEs) such as Freddie In the first three months, 690,000, 930,000 and 1.06 million people joined the Mac and Fannie Mae. workforce respectively, in cities and towns, with the figure increasing month-on- The lender’s domestic institutions extend- month. The average number of people joining the workforce reached 890,000 per ed RMB 569.4 billion of RMB-denominated month amounting to a 51.4 percent increase over the fourth quarter of last year, a new loans in the first quarter, up 24 percent noticeable sharp rise. from the end of last year, as the country’s Yin believes that at present the current employment situation still remains banks have been instructed to make more very grim, and demand for employment has yet to return to normal levels. (People’s loans in a bid to stimulate the slowing econo- Daily Online) my. RMB-denominated customer deposits increased 18 percent from the end of last year to China’s energy intensity: 2.9% ↓ in Q1 RMB 723.1 billion in the first quarter, it said. However, the bank’s income from interest China’s energy intensity dropped 2.89 percent in the first quarter, the Na- declined 9.74 percent from a year ago to RMB tional Bureau of Statistics (NBS) reported on April 29. 36.84 billion in the first three months. The decrease compared with 2.62 percent a year earlier. The NBS said the The bank said it adjusted its holding of calculation, which reflects how much energy is used to produce a unit of gross do- foreign currency-denominated assets down by mestic product (GDP), was based on a 3.04 percent increase in energy consump- 6 percentage points to 29 percent of the total tion and the 6.1 percent GDP expansion in the first quarter. in the first quarter. The non-performing loan “The latest figure shows the central government’s efforts to stimulate eco- ratio was 2.24 percent at the end of March, 0.41 nomic growth and reduce energy consumption are taking effect,” said an NBS percentage points lower than the end of last official. year, with outstanding non-performing loans Experts attributed the decrease to “a positive change in the country’s eco- at RMB 85.13 billion. nomic structure.” In the first quarter, the proportion of tertiary industry in GDP The bank’s shares closed at 2.76 HK dol- was up 1.6 percentage points while that of secondary industry dropped 1.9 per- lars in Hong Kong, unchanged from the previ- centage points. The increase in output of energy-intensive industries declined ous close. Shares in Shanghai edged up 0.29 12.5 percentage points from a year earlier. percent to RMB 3.47. Trading in Shanghai Energy intensity in large-scale industries fell, with the steel industry down ended before the lender’s first-quarter results 7.51 percent, nonferrous metals 16.58 percent and power production 10.17 percent. were announced. (Xinhua) (Xinhua)

8 a griculture

Assistance campaign to benefit over 6.8 million migrant rural workers

The All-China Federation of Trade Unions (ACFTU) revealed on April 24 that more than 6.8 million migrant rural workers will receive employment assistance this year. The organization will help 200,000 laid-off jobless and migrant rural workers enter the household management service industry. Approximately 20 million migrant rural workers lost their jobs in the period before and after the Spring Festival holiday. According to data released by China’s National Bureau of Statistics, the average cash income of rural households in the first quarter of this year stood at RMB 1,622, an increase of 8.6 percent compared with the same period last year. Of these, the average wage China’s pork prices income was RMB 655 per rural household, an increase of 7.7 percent compared with the same period the year before. The average wage income from off-farm employment was RMB 383 per continue to fall in household, an increase of 8.2 percent. In February, the ACFTU started an assistance campaign covering more than 10 million mi- April grant workers, prioritizing employment assistance. The campaign plans to provide employment Pork prices in China fur- assistance and offer rights protection services as well as livelihood assistance to over 5 million ther dropped in April due to people. The campaign also plans to acquire over 5 million new migrant rural worker members. over market supply and fall- This year, 100 employment training (practice training) bases with names designated by the ing demand, analysts said on ACFTU will be established around China. At the same time, the ACFTU will finance the estab- May 8. lishment of 10 bases for the training and demonstration of migrant workers’ skills in provinces Statistics released by the with high populations of migrant workers, in order to train a group of medium to high-level National Development and technicians. According to the plan, more than 2 million migrant rural workers will be trained this Reform Commission (NDRC) year. Over 500,000 of these are expected to obtain certificates for technical proficiency. More showed pork prices in major than 3 million migrant rural workers will be given help to find employment. Chinese cities averaged RMB At the same time, the ACFTU is in active communication with China’s Ministry of Com- 10.13 per kg (US$1.5) at the merce and Ministry of Finance, planning to train 200,000 laid-off workers and migrant rural end of April, down 10.4 percent workers to provide household services in 2009. The ACFTU will also launch a micro-credit pro- from the same period last year. gram together with the China Banking Regulatory Commission, to solve issues such as venture The decline led the pro- capital bottlenecks for migrant rural workers and laid-off workers through communication and portion between pork prices coordination to help them start their own businesses independently. and grain prices to stand at By the end of 2008, China’s total number of migrant rural workers had reached 230 million. 6.18 to 1, the lowest point since Of this 230 million, those working in cities amounted to 130 million, three times more than the May 2007, gaining on the total workforce of state-owned enterprises. To date, the number of migrant rural workers who threshold for hog breeders to have been a member of the ACFTU stands at 72.16 million. earn profit set by the NDRC, The entire campaign requires a total fund of more than 800 million yuan, all of which will which is 6 to 1. come from public funds. The funds will be issued through strict approval procedures, and the The government will allocation and disposition of the employment training fund and assistance fund will regularly be enforce subsidies for the pork announced to the public. (People’s Daily Online) production industry if the figure falls below 5 to 1. Pork prices were also affected by China announces US$10b rural support the falling demand in summer, when people tend to eat fewer China’s State Council, or Cabinet, on April 23 announced measures to support agriculture, pork products, said NDRC in given the negative impact of the global downturn. The measures were taken during a Council ex- a statement posted online. The ecutive meeting, chaired by Premier Wen Jiabao. A/H1N1 flu was also a factor The meeting was told that the global downturn was still worsening and its negative impact that made people more cautious on agricultural production and the rural economy had become more obvious, with global com- when choosing meat for meal, modity demand and prices slumping. according to Wang. More should be done to stabilize agricultural production and increase farmers’ income, ac- The continuous price fall cording to the meeting. It said RMB 3 billion (US$439.2 million) in central funding would be has already aroused concerns allocated to support building standard pig and dairy farms. Strong steps must be taken to boost for further drop in CPI (Con- rural employment by increasing training and financial support, it said. sumer Price Index) later this The meeting urged better methods in the state purchase and reserve of farm staples and pro- year, as the prices of pork, a motion of agro-processing companies. It also demand- major meat on Chinese fami- ed greater effort to improve the agriculture product lies’ dinner table, is a main circulation system and quality and safety supervision. drive behind CPI changes. It said RMB 65 billion (US$9.5 billion) in central “It will impose large pres- investment this year would go to fund the construction sure on the country’s CPI if the and improvement of rural infrastructure, including downward trend in pork prices education, health care and irrigation. continues,” said Wang. Food Attendees also approved a draft regulation on lot- prices, a major component of tery management. The regulation covers ticket issues China’s CPI, fell 0.7 percent and sales and fund management. The regulation would year on year in March, with be publicly released after further revision, it said. pork prices down 23 percent. (China Daily) (Xinhua)

9 uto A Mazda increases stake in China sales ture

Japan’s Mazda Motor Corp. said April 30 it has spent RMB 49.5 million (US$7.2 million) to raise it stake in a joint venture sales company in China. The deal allowed Japan’s third-largest car maker to increase its share in FAW-Mazda Motor Sales Corp. to 40 percent from 25 percent. Mazda’s investment increased the joint venture’s registered capital from RMB 100 million to RMB 125 million, according to China Daily in May 1st. Analysts said an increased stake in the sales company will help Mazda become more profitable as it gears up expansion in China to offset slowing sales elsewhere due to the global recession. The Japanese auto maker sold a company record of 37,217 units in the first quarter, an increase of 22 percent from a year earlier, fueled by government stimulus measures for small car purchases and more dealerships, according to Noriaki Yamada, president and chief operating officer of Mazda Motor (China) Co.. Mazda had 125 dealerships in China at the end of March. The figure is expected to reach 140 by year end. Mazda also has a three-party venture with Chang’ an Automobile Co and Ford Motor Co in China, producing Mazda 3 sedans and Mazda 2 com- pact cars. (Xinhua)

China auto sales hit new high in April China FAW, Volk- Sales of China’s domestically made vehicle set a record high of 1.153 million units in April, swagen plan 5-bil- up 25 percent from a year earlier, the China Association of Automobile Manufacturers (CAAM) said May 8. This represents an increase of 3.91 percent from March. In March, sales rose 5 percent lion-yuan auto year-on-year to 1.11 million units. Automakers produced 1.157 million motor vehicles last month, up 17.9 percent year-on-year, plant in Chengdu according to CAAM. It was 5.61 percent higher than March. CAAM said the April figure showed the country’s auto industry had seen signs of recovery as the government’s stimulus policies began China First Automobile to have an effect. The association said the continuous pick-up in passenger car sales was bolstered Works (FAW) and Europe’s by government stimulus policies. China unveiled a support package for the auto industry early this auto giant Volkswagen said year, cutting purchase taxes for cars with small engine capacities and providing subsidies to rural May 8 they would jointly in- purchasers. vest RMB 5 billion (US$735.3 In the first four months, motor vehicle sales hit 3.832 million units, up 9.4 percent year on million) to build an auto plant year, while a total of 3.725 million units were produced, up 6.4 percent, according to CAAM. in Chengdu, capital of south- Passenger car (sedans, SUVs and MPVs) sales in April rose 37.37 percent from a year earlier to west China’s Sichuan Prov- 831,000 units. The March figure stood at 772,000 units. While commercial vehicles (busses, trucks ince. and pick-ups) fell 4.53 percent from March to 322,100 units in April, but rose 1.38 percent from a The plant is expected to year earlier. Passenger car sales in the first four months climbed 15.09 percent from a year ago to create 4,500 jobs. It will have about 2.83 million units. Production totaled more than 2.69 million units, up 9.75 percent year on a planned annual output of year. (Xinhua) 150,000 and will make the Volkswagen Jetta. The firms didn’t announce how the in- Auto Shanghai 2009 takes the spotlight amid vestment would be divided. Xu Jianyi, FAW’s general global slump manager, said the new investment was made in an effort The Auto Shanghai 2009 kicked off at the International Expo Center in Shanghai on April to support reconstruction of 21, boasting a record high of 1,500 carmakers worldwide. Since its debut in 1985, the event, held Sichuan, which was hit by a every other year, has become one of the most influential auto exhibitions worldwide.The show has strong earthquake on May 12 caught up with the Frankfurt, Geneva, Paris, Tokyo, and Detroit shows, after being added to the last year. international Class-A auto show list. Volkswagen China CEO Earlier this year, both the Detroit and Geneva shows saw smaller numbers of participants Winfried Vahland said the compared to previous years, with some major auto players absent. But now, the Shanghai show Chengdu plant would serve might have overtaken them as it is putting on a brave foot forward, providing a great platform for as an important production global players amid the lingering financial turmoil. Quite a number of those, like Japan’s Nissan, base to achieve its 2-million have shown up in Shanghai with all they have. Huo Jin, the Nissan’s PR manager explained that sales target in China by 2018. the company will present 17 car models in Shanghai, 11 under the name Nissan, while another six Europe’s largest auto producer, under the sub-brand Infinity. The scale is equivalent to last year’s and hasn’t shrunk in Shanghai. Volkswagen, entered China Despite the recession back at home, America’s top three automakers, General Motors, Ford in 1984 and has invested 6 and Chrysler, showed up to the show with all they have. The three auto giants sustained their posi- billion euros (US$8 billion) tion at the Expo Center by jointly occupying 5,000 square meters. Teaming up with its Chinese in China so far, according to partner of Chang’an Motor, Ford plans to present 37 car models. Several domestic automakers the company. The European chose the Shanghai show as a good chance to renew their images through brand restructuring. auto maker has 13 joint ven- Cherry, one of the major independent automakers in China, will present its productions in four tures in China, including one sections, each with an independent sub-brand, namely Chery, Riich, Rely, and Karry. Two of the between FAW and Volkswa- newly set up sub-brands, Riich and Rely, will be used on luxury cars and high-end MPVs. gen in Changchun, capital of “This is the first time that Chery will display its four sub-brands in a show,” the company’s northeastern Jilin Province, spokesman Jin Yibo said. Jin believes the Shanghai Auto show will be a key platform for domestic which was established in 1990. auto makers to promote themselves and inject more vitality to the country’s auto market.Similarly, Volkswagen sold more than 1 Zhejiang-based Geely Auto showed up with a slogan of “New Geely,” and three new sub-brands million vehicles in China last on display at the show - GLEAGLE, EMGRAND, and SHANGHAI ENGLON, each targeting dif- year. (Xinhua) ferent sectors of the market. (CRIEnglish. com)

10 S teel

Australia approves Ansteel’s additional stake in Gindalbie Australian Treasurer Wayne Swan announced on May 8 his approval on the China has no intention of Chinese steel maker, Anshan Iron and Steel Group Corporation (Ansteel)’s acquisition of an additional stake in Australian iron ore miner Gindalbie Metals Ltd. giving up setting iron ore Ansteel had agreed on a number of undertakings that would support Australian mining jobs and protect Australia’s investment participation in the Chinese resources benchmark price market, Swan said. “My approval under the Foreign Acquisitions and Takeovers Act 1975 is conditional upon Ansteel supporting the wider development of infrastructure Luo Bingsheng, vice chairman of in the Mid-west (of Australia), and maintaining agreed levels of Australian partici- China Steel Industry Association, said pation in a green fields joint venture in China’s Liaoning Province,” Swan said in a April 28 that China had no intention of statement. giving up the “initial pricing power” of Swan said this foreign investment decision has allowed Ansteel to have a stake the ongoing iron ore price negotiations. of up to 36.28 percent in Gindalbie, conditional upon legally enforceable undertak- Chinese steelmakers are asking for price ings by Ansteel. Ansteel was also a 50 percent partner in a joint venture with Gindal- cuts of more than 40 percent for annual bie to develop the Karara Iron Ore Project.The Karara Iron Ore Project has been a 1.8 contracts of iron ore. Rio Tinto and Vale billion Aust dollars (US$1.4 billion) development in the Mid-west region of Western have accepted a 20-percent price cut. Australia. (Xinhua) There were reports that if Japan and the Republic of Korea (ROK) settled the iron ore price earlier this year in the negotiation, steelmakers in different coun- World Steel Association: China’s steel use to tries might get a better price, as the steel go down 5% output in the two countries was declining sharply in the first quarter despite an output increase in China. Crude steel output China’s apparent steel use, predicted to see a five percent decline in 2009, will rose 1.74 million tonnes year on year in lead the recovery for the whole world with a total steel use decline of 14.9 percent, the first quarter to 124.7 million tonnes the World Steel Association said here on April 27. The World Steel Association in China, while large and medium-sized (Worldsteel), which represents 180 steel producers, national and regional steel in- producers lost RMB 3.31 billion (US$ dustry, forecasted that worldwide apparent steel use is expected to decline by 14.9 484.9 million) in the first quarter as steel percent to 1,018.6 million metric tons (mmt) in 2009 after declining by 1.4 percent to prices returned to 1994 levels. 1,197 mmt in 2008. Japanese steel output in March fell However, steel demand is expected to stabilize in the latter part of 2009 lead- 46.7 percent year on year to 5.74 million ing to a mild recovery in 2010. China is expected to witness a negative growth of tonnes, dropping for the sixth straight minus five percent in the apparent steel use in 2009 as the ongoing global economic month and that of the ROK was down crisis hits China’s exports, in addition to the effects of a slowing domestic economy, 21.2 percent to 3.7 million tonnes as Worldsteel said. The last time China’s apparent steel use recorded a negative growth global demand for cars and electronics was in 1995 when the apparent steel use fell by 17.2 percent following the real estate slowed. “If the iron ore price was in line bubble burst. “China’s stimulus policy which put more emphasis on infrastructure with our requirements, we would accept development will give a boost to its steel industry, while more mature economies are it. If others’ agreements are not in line still trying to stabilize its bank industry,” said Ian Christmas, director general for the with our requirements, we will stick to World Steel Association. our own claim,” Luo told reporters April Emerging economies are being affected by the economic crisis, but to a lesser 28. He said various miners and steel pro- degree, Christmas said. India, whose economy focuses more on software and textile, ducers had come to the agreement that is projected to have a positive growth of two percent for the apparent steel use in the global steel industry would generally 2009, while BRIC countries as a whole are forecasted to contract by only minus 5.9 see an over-supply this year, so miners percent, according to the Worldsteel prediction. While the projected apparent steel should cut iron ore prices for the 2009 use for the world, excluding BRIC, is down 22.3 percent in 2009, the world excluding annual deal, but there was no agreement China is expected to decline by 20.4 percent in 2009. on the scale of the cuts. Within the NAFTA (North American Free Trade Agreement) region, the U.S. is In the similar development, Michael expected to show the largest decline in steel demand in the post-war period. In 2009, Zhu, Vale’s China president, said April the apparent steel use is expected to fall by 36.6 percent. Europe will be the most af- 28 at an industry conference in Beijing fected region outside NAFTA. The EU will have a 27 percent decline. Other part of that the Brazilian mining giant would cut Europe and CIS regions are expected to show a decline of more than 25 percent in iron ore output by 25 percent this year. their apparent steel use in 2009. The 65-percent price rise of iron ore Japan has also been affected by a sharp decline in the exports of its steel-using agreed last February between Japanese, industries, especially automotive and machinery. The apparent steel use is expected ROK steelmakers and leading Brazil- to fall by 20.4 percent in 2009. “The progression of the U.S. financial crisis into a ian iron ore supplier Vale set the 2008 global economic crisis brought about a massive and regionally synchronized global benchmark price. China’s leading steel- decline of steel demand in late 2008. For most of the world this trend has continued maker Baosteel in December 2006 beat into the first quarter of 2009,” said Daniel Novegil, chairman of the World Steel Eco- other buyers in setting the iron ore price nomics Committee. Improvement in steel consumption for the second half of 2009 for fiscal 2007 with a slight 9.5-percent will depend on the effects of government stimulation packages, the continued sta- price rise. The lower-than-expected in- bilization of financial systems and a return of some consumer confidence,” Novegil crease was deemed a success for Chinese said. The Board will review a Short Range Outlook for 2010 at its Board Meeting in buyers. (Xinhua) October 2009 in Beijing. (Xinhua)

11 hemical

C PetroChina to raise 100 bln yuan for major business PetroChina sets The financing plan was approved at the annual shareholders meeting held on May 5. The fund will support major strategic projects such as oil exploration and development in north- up joint venture western basins, oil refining business, natural gas pipeline construction between Central Asian countries and China as well as crude oil pipeline building between China and Russia, according to PetroChina. with Venezu- The company would also focus on overseas expansion this year, as falling oil prices on the international market have presented arare chance for going out, PetroChina president Zhou Jiping told Xinhua ela national oil at the meeting. The oil producer would strengthen cooperation with both resources-rich countries such as Ka- company zakhstan, Qatar and Venezuela and oil giants such as Exxonmobile, BP and Shell, Zhou said. With China’s producer price index (PPI) declining and the domestic demand for energy expected PetroChina and to rise, PetroChina will lower costs to strengthen the development of major business, said PetroChina PDVSA, the national oil chairman Jiang Jiemin. company of Venezuela, According to Jiang, the company will cut 10 percent of the investment in projects already have established a joint launched, but the total investment scale will be kept at the same level as that in 2008. PetroChina’s cap- venture on oil exploration ital expenditure in 2008 exceeded RMB 232 billion. The 100-billion yuan financing would not upset and development, said the company’s balance sheet, said Zhou Jiping. (Xinhua) Jiang Jiemin, Chairman of PetroChina Company Limited on May 12. Petro- Chinese ministry rules out sudden fuel price hike China held 40 percent of the new company’s shares, Jiang told Xinhua at the The government ruled out any immediate increase in fuel prices on May 8 despite increasing mar- annual shareholders meet- ket speculation about a possible hike, top pricing officials said. Officials at the National Development ing. and Reform Commission (NDRC) said the recent oil price rise on the global market indicated that the According to Jiang, a domestic fuel prices should be raised. joint venture transporting But Xu Kunlin, deputy director of NDRC’s pricing department, told a news briefing on May 8, oil and two joint refineries that the authorities would only increase prices after further careful consideration. would also be established. According to the fuel pricing mechanism announced on Friday, China will adjust its fuel prices PetroChina would hold 50 when global crude oil costs fluctuate more than 4 percent over 22 straight working days. percent stake in the for- The global crude oil price has been increasing since March, rising from 35 U.S. dollars a barrel to mer and 60 percent in the around US$58 on May 7. This was the first time the government made public its fuel pricing mecha- latter two. nism since it announced last December that it would link domestic gasoline and diesel prices to the One of the refineries international market. would be located in east- Xu said many oil traders had engaged in speculative dealing in recent days amid rumors of a price ern Guangzhou Province, hike. “To prevent speculative trading, we will not adjust oil prices exactly in line with the benchmarks Jiang said. PetroChina set in the regulation.” “And of course, we will not increase the prices on May 8, they can profit from is expected to produce speculation,” Xu added. 40 million tons of crude The government raised the benchmark retail price of gasoline by RMB 290 yuan (US$42) per ton, oil from Venezuela an- or 5 percent, and diesel by 180 yuan per ton, or 3.7 percent, on March 25. nually. He also noted that Xu said the price revisions show the new pricing mechanism that took effect on Jan 1 means the construction of the China government can respond accordingly to international oil price changes. He said the government would part of the pipeline trans- take the global economic situation into account when deciding the adjustment of oil prices. “For ex- mitting crude oil from ample, if the U.S. economy continues to worsen and oil prices come down, we will not increase prices Russia to China will be in the short term.” started this month and the To prevent speculation, Xu ruled out announcing the timing of oil price adjustment in advance. “I transmission capacity is don’t think we need transparency expected to expand from in this regard.” Cao Changqing, the current annual 15 mil- director of the NDRC pricing lion tons. department, said the Chinese Taking advantages government has tracked the trend of the decreased prices of of several oil markets worldwide. oil and gas, PetroChina China only monitored the oil would expand its overseas price in Singapore in the 1990s. business, and strengthen “We’ve learnt a lesson from that cooperation with both because that created many mas- energy producers and in- sive profit-making opportunities ternational energy giants for speculators,” he said. such as ExxonMobile, BP PetroChina said on its web- and Shell, Jiang said. site that China’s ex-factory gaso- PetroChina is the line and diesel prices are linked Hong Kong and Shanghai- to the prices of Brent, Dubai and listed subsidiary of China Cinta crude oil, and it will also National Petroleum Cor- take into account transporta- poration, China’s largest tion, processing, tax and refining oil producer. (Xinhua) costs. (China Daily)

12 T extile

Textile sector will bottom out very soon – Ms Lilin, CCA Himfr.com analyzes tex- The just completed cotton season played havoc and spared neither the farmer nor the trader in the initial months of the new cotton crop arrivals in the market. Despite tile and clothing trends the fact that prices ruled at four year lows, there was minimal demand from the textile in 2009 mills for want of liquidity. China fared no better, but was saved by the market intervention of the government which procured huge amounts of cotton from the farmers Himfr.com, one of China’s leading and ginners. B2B search platforms with more than With the objective of a getting a clear picture in the current market 30 B2B industry websites to its name, situation,Fibre2fashion spoke to Ms LiLin, Director (Public Relations),China Cotton including Frbiz.com (http://www.frbiz. Association, who said, “China is the largest cotton producer, consumer and importer in com/leather-goods/), analyzes textile and the world. In 2008, China’s cotton output reached 7,490,000 tons and imports registered clothing trends in 2009. 2.11 million tons; yarn production completed 21.49 million tons, giving it the number-1 Himfr.com believes that in the long rank in the world”. run, China’s foreign trade depends on She added by saying, “China’s cotton imports from India marked 610,000 tons, ac- improvements in the current global eco- counting for a 29 percent share of China’s total imports due to which India is the second nomic situation; however, with the de- largest exporter of cotton to China, but impacted by the financial crisis, demand from cline of the domestic retail sales growth international market is in the doldrums, textile and clothing products are overstocked rate in the United States, the short-term and exports are disrupted, creating a direct impact on cotton demand”. suggest the possibility of improvements She continued by saying, “In October last year, China’s domestic cotton price fell in exports for Chinese manufacturers. by a larger margin when new cotton arrived in the market and the Chinese government Compared to the uncertain foreign introduced provisional procuring measures in time and purchased 2.7 million tons of trade situation, Himfr.com is more op- cotton for state reserves in total, which effectively protected the interests of farmers and timistic about the domestic market: the stabilized cotton prices in domestic market”. main reason comes from the confidence The present difficulties are temporary, in the long run, China’s textiles and of China’s economic development. clothing are still relatively competitive in international market, and China has great Himfr.com estimates that if China re- potential lying in domestic demand. At present China’s economy has shown signs of lies on the advance of urbanization and warming-up. Meanwhile, China has implemented a series of plans to revitalize the demographic changes brought about by textile industry, it is believed that China’s textile industry will bottom out very soon”, China’s clothing market, the annual ca- she concluded by saying. pacity will be at least a 10% growth, and We next asked her, if she visualizes the market bending towards the man-made if you consider economic growth brings fibre industry, to which she replied by saying, “No matter, whether at home or abroad, increased spending power to residents, cotton products have occupied a stable market share both in China and other countries the expansion of the market capacity in the world and with the improvement of living standards, as well as enhanced aware- would far exceed the rate of 10%. Of ness of returning to nature and environmental protection, people will always have a at- course, in the short-term, the slowdown tachment for cotton made products”. in economic growth on income levels We concluded the interview by asking her about the consumer demand for organic and spending power is inevitable. We be- cotton to which she replied by saying, “As regards organic cotton, we have not conduct- lieve that the slowdown in domestic sales ed any special study or research related to organic cotton, since, China has very small is due, in large, to lower prices that have production and even less consumption”. (Fibre2fashion News) mainly resulted from the falling stock prices seen in clothing enterprises. In the future, the domestic retail sales growth Pak textile industry may get benefit from fine rate is expected to recover. Seeing price indexes fall one after quality Chinese chemical fibre the other is of great significance, showing that enterprises further reduce pro- Pakistan may boost its textile production by using fine quality Chinese chemi- duction to offset cost pressures. Himfr. cal fibre at competitive cost, said a major Chemical Fibre concern Saturday. “We have com believes that this will help re-estab- good trading terms with some Pakistani entrepreneurs and wish to export our product lish the use of a temporary price advan- in large quantity there”, said Ms Hu Chen the Chief Executive of Jiangsu Huaxi Group tage to deal with economic difficulties. Bao Chang while talking to APP. New policies in China have now set Hu runs a large Chemical Fibre group in Hauxi, one of the four richest villages in the export tax rebate rate to 16 percent. China. She exports products to various countries as well as in international market at Himfr.com believes that the government competitive cost. Hu said that last year her group exported around one thousand tonns has been so careful in its adjustment of of finished Fibre to Pakistan. the industry for the export tax rebate Meanwhile, the former Secretary of NPC Huaxi village and longest serving Chair- rate to prevent the idea of trade protec- man We Ren Bao while talking to mediapersons at Huaxi said that his village will en- tionism. Due to weak overseas demand, thusiastically participate in the Shanghai World Expo 2010, as its theme is “Better City, solely relying on the increase of the ex- Better Life”, and his village has all the facilities that are prerequisite for a better living. port tax rebate rate to stimulate exports He said that “we have made elaborate arrangements to ensure excellent environment, is not the reality. The tax rebate rate while establishing over 60 various kinds of factories with zero environment hazard”. adjustment is of more important signifi- According to officials of the Huaxi Group, the group has provided employment cance for the foreign trade enterprises to opportunities to over 20,000 workers in various fields.Besides imparting vocational set aside space for price cuts to ease the training to over 6000 working including migrants with handsome stipends. The average pressure on enterprises exports. (About annual income per head is US$1,000, besides other financial facilities, they said. ctei( ) Himfr.com)

13 Five more companies buy shares from melamine-scandal Sanlu Group Wal-Mart China revises stream- ight I ndu s try Five more companies on May 5

L lining plan after trade union bought shares previously owned by the bankrupt Sanlu Group, a Chinese dairy steps in firm at the center of last year’s melamine Wal-Mart China headquartered in south China’s contamination scandal.The stakes were Shenzhen City has agreed to revise a plan on payroll auctioned in Shijiazhuang, capital of the cut involving 2,000 mid-level managers in its outlets northern Hebei Province, said sources nationwide, after a trade union stepped in to mediate, with the Jiahai Auction Co., Ltd. a union official said here April 22. “The company The assets at the auction May 5 will give a one-off reward of RMB3,000 (US$440) morning included Sanlu’s shares in four to those who agree to be transferred to work in other Hebei-based companies and a Tianjin stores, or receive training offered by the company,” company — the Tianjin Sanlu Ltd., Co, from which the Sanlu held 51 per- said Wang Tongxin, vice chairman of the Shenzhen cent of the shares. Auction of the company’s shares failed to win bids this Federation of Trade Union. past April as the starting prices were too high.The auction was not open to The federation became involved after trade media. According to an unnamed auctioneer with Jiahai, most of the buy- unions representing Wal-Mart workers reported on ers were shareholders of these enterprises. But he didn’t give details of the April 11 that senior management at the US-based buyers. retailer planned to relocate some mid-level managers Two more auctions are expected to be held on May 8 and 12, when to new stores in other Chinese cities under threat of more shares, as well as trademarks and 12 patent rights, are to be under the demotion or even dismissal. “After talks with the em- hammer. Four planned auctions of Sanlu’s assets have been held — the last ployee representatives, Wal-Mart has taken the con- one being the April auction that failed to win any bids. Sanlu Group, which cerns of the employees and made big revisions to its was based in Shijiazhuang, had been China’s leading seller of milk powder plan, which finally reached a win-win situation,” said for 15 years until the melamine adulteration scandal broke in September Wang. China Daily also reported that the managers last year. The group’s revenue hit RMB 10 billion (about US$1.5 billion will be promoted to a higher position if their current U.S. dollars) in 2007. The company’s tainted baby milk powder was found positions have been cancelled in the new stores and to have caused the deaths of at least six children and sickened more than they will not see a drop in salary. 300,000others. Wal-Mart also agreed that managers who stay Background: on at the same store would not be punished or miss From Aug. 2 to Sept. 12 in 2008, Sanlu Group produced 904 tonnes of out on a pay rise, the newspaper quoted its sources melamine-tainted baby formula powder and sold 813 tonnes of the tainted as saying. The revisions will be applied to all Wal- products, making RMB 47.5 million (US$6.9 million). The Ministry of Mart stores in China, according to the federation. “It’s Health said it was likely the tainted milk scandal with Sanlu Group at its understandable that a company adopts a restructur- center killed at least six babies. Another 294,000 infants suffered kidney ing plan at an adverse time, but the decision must be stones and other urinary problems. Sanlu Group, partly owned by New achieved after negotiation with the employees, rather Zealand dairy product giant Fonterra, stopped production on Sept. 12. than a one-sided order, if it would affect the benefits A bankruptcy petition for Sanlu has been filed in the face of a 1.1 billion of the employees,” Wang said. Wal-Mart now has yuan debt. On Dec. 19, the group borrowed RMB 902 million to pay the 104 outlets in China with 50,000 employees. The medical fees of children sickened by its melamine-tainted baby formula company plans to open 23 outlets in China this year, and to compensate the victims. Last year, 1,173 suspects in Hebei Province despite of the financial crisis. “After revision, our were arrested over these charges, local government said. Meanwhile, 1,244 program is going well. A growing number of em- government employees were investigated on corruption accusations. The ployees understood the company’s strategy and are province’s total arrests last year were put at 43,000. (Xinhua) willing to accept the arrangement,” Chen Lu, a Wal- Mart China public relations official. However, some employees have said it will take time to rebuild their Gome reports first fall in annual net profit trust. “We are not sure now Gome, China’s largest consumer electronics retailer in terms of num- whether the ber of stores, announced its net profit for 2008 fell by seven percent from company can a year earlier, the first ever since listing.The company did not say when it keep its prom- will resume trading, according to April 29’s Shanghai Securities News. ise. Meanwhile, The company has suspended trading for five months due to the inves- we are con- tigation of Gome’s founder Huang Guangyu who was in police custody for fused about the alleged illegal share trading. Com- future. Some of pany executives attributed the profit the measu res decline to the sluggish electronics could not last market in the country due to the for a long time,” financial crisis, and more impor- said a Wal-Mart tantly, to the ongoing investigation manager in on Huang Guangyu. As Gome’s Shenzhen, who 2008 financial report showed, the asked to remain company posted a profit of RMB anonymous. 1.05 billion last year, falling from (Xinhua) RMB 1.13 billion in 2007, on sales of RMB 45.9 billion. (Xinhua)

14 E lectronic s

Samsung launches LED manufacturing base in N China Samsung LED, a light-emitting diodes (LED) company of the global electronics giant Samsung, has set up its first overseas manufacturing base in north China’s port city Tianjin. ATT buys divested Ve- The base, Tianjin Samsung LED Co., Ltd, was established with a starting capital of US$30 million, according to the Tianjin Economic-Technological Development Area (Teda) Admin- rizon wireless assets istrative Commission. AT&T Inc. agreed Friday to Commission spokesman Zhang Liang said May 9 initial investment to the Tianjin manu- buy selected wireless assets from facturing base would reach US$90 million. He said the company had just finished registry Verizon Wireless for $2.35 billion in with the local government in Teda, but it was not clear when the base would be constructed cash. The deal is expected to close by and begin production.The base would be dedicated to the making of LEDs, a new generation year’s end. The Federal Communica- of lighting source that excels traditional light sources, as it is less energy-consuming and long- tions Commission required the di- lived, and improves image contrast and display. vestiture as a condition of Verizon’s LEDs are used in a wide range of products such as LCDs, mobile telecommunications $28.1 billion acquisition of Alltel Inc. devices and lighting equipment. Samsung has so far invested in 11 manufacturing compa- in January. The assets AT&T will ac- nies in Teda, with an overall investment of US$1.6 billion. Tianjin takes about one third of quire include the wireless properties, the group’s investment portfolio in China.As north China’s biggest port city and a traditional their licenses, network assets and industrial base, Tianjin is aiming to become the country’s third fast-growing area besides the 1.5 million subscribers in 79 primar- two economic engines in the Pearl River Delta in south China and the Yangtze River Delta in ily rural, service areas in 18 states: east China. (Xinhua) Alabama, Arizona, California, Colo- rado, Iowa, Kansas, Michigan, Min- nesota, Montana, Nebraska, Nevada, Huawei demonstrates live 3G in Bangladesh New Mexico, North Dakota, South Dakota, Tennessee, Utah, Virginia Huawei Technologies Co. Ltd demonstrated live Third Generation Telecom Technologies and Wyoming. AT&T expects the (3G) in Bangladesh’s capital Dhaka on May 7 at a road show. Posts and Telecommunications conversion of networks from Veri- Rajiuddin Ahmed Raju attended the inauguration ceremony of the road show which will end zon’s CDMA technology to its own on May 12 and showed great interest to the innovative technologies Huawei showcased. Raju GSM technology and transition of expressed his hope that 3G will enter into Bangladesh’s market very soon. operations to AT&T to take no longer Huawei made the live demonstration from a specially built truckwhich earlier traveled than a year from the closing date. many countries across the world, including India and Vietnam to display the cutting-edge Verizon extends cloud back-up 3G technologies. Thevisitors include most of the mobile operators in Bangladesh. The show, to enterprises which includes video call and high speed internet, is aimed at pushing the development of 3G General Services Administra- in Bangladesh, Huawi Technologies (Bangladesh) Limited Chief Executive Officer Zhang Hui tion Networx Universal contract told Xinhua at the show. holder Verizon Business’s new Zhang said, “the government of Bangladesh has committed to realizing Digital Bangla- Remote Backup and Restore man- desh by 2021. 3G is one of the major drives to realize the ambition of Digital Bangladesh.” aged services suite via the cloud “As one of the mainstream 3G suppliers in the world, Huawei is ready to cooperate with the makes automatic backups of data on government and operators of Bangladeshto offer high-speed mobile broadband solutions,” he enterprise PCs to the carrier’s data said. Huawei began its operations in Bangladesh in 1998. Over the years, the company has centers. grown to become one of the country’s leading telecommunications solutions suppliers. Hua- “Large businesses and govern- wei is also involved with many corporate social responsibility projects in Bangladesh includ- ment agencies rely on the avail- ing donating network equipment to the University of Engineering and Technology (BUET). ability of information, and its loss (Xinhua) can have a profound impact,” said Nancy Gofus, Verizon senior vice president of global business prod- Online trader Alibaba Q1 revenue up 19%, net profit ucts. “Our newly expanded suite of remote backup and restore services down delivers cost-effective solutions that Alibaba.com Limited, a leading business-to-business (B2B) e-commerce company in ease the burden on IT departments China, said late May 6 its revenue rose 18.6 percent year on year in the first quarter to RMB by providing an automated means of 806.6 million (US$118.3 million), as more companies resorted to online trading to lower cost storing and accessing critical data at a time of financial crisis. Statistics showed the company’s online market had a total of 40.3 and offering an important business- million registered traders both at home and abroad as of March 31, up 36 percent from a year continuity tool.” earlier. It increased 6 percent compared with the last quarter in 2008. Verizon’s service uses de-du- The growth in client numbers reflected online market’s capability to resist the blow from plication to cut bandwidth needs and economic crisis and e-commerce’s potential to development, the company said in its quar- storage space, and allow the appli- terly report. However, Alibaba’s net profit dropped 15.7 percent year on year in the first three cation to operate automatically and months to RMB 253.4 million.The company attributed the decline to an enhanced investment in the background. Full backups of in customer service, employee training and technology innovation for market expansion. Net data demand staggering amounts of profit rose 27.1 percent compared with the previous quarter, Alibaba said. resources and can bring a network The online trader pledged to continue investment in the next several quarters in areas to its knees. Yet even incremental such as the development of new Internet trading platform supporting multiple languages, em- backups — backing up only those ployee recruitment and global marketing. Alibaba’s combined cash and bank deposit exceeded files that have changed — can result US$1 billion by the end of the first quarter, up 28 percent from a year earlier.The figure more in many duplicates of the same data than doubled from the 400-million U.S. dollar fund reserve it had when coming into the mar- and place heavy demands on a net- ket in 2007 and made Alibaba an Internet company with the biggest cash reserve in the coun- work. (washingtontechnology) try. (Xinhua)

15 China to build its biggest high-speed train factory Construction of China’s biggest manufacturing base for China’s Zhuhai high-speed trains is to be completed in the northeastern Jilin

ran s portation Province in June next year, local sources confirmed on May 6.

T speeds up trans- It will also become China’s biggest research and development center, according to Han Fengwu, deputy general man- port plans ager of the Changchun Railway Vehicle Co., Ltd (CRC). The Zhuhai is speeding up base, which cost RMB 2.5 billion (about US$0.36 billion), is its construction of highways capable of producing 500 cars for ordinary passenger trains, in a bid to become a traffic 800 cars for high-speed trains which run at a speed above 350 center in the western Pearl kilometers per hour and 800 cars for inter-city express trains River Delta (PRD) area, the above 120 kilometers per hour. Construction on the base began local transportation author- last May. ity said on May 7. The city CRC, a share-holding enterprise registered in March will invest more than RMB 2002, produced China’s first underground train, magnetic levi- 14 billion (US$2 billion) in tation train and high-speed train. The Ministry of Railways 10 highway projects. The launched a major overhaul of the rail system on April 1, the work will start this year and seventh since 1997, featuring faster trips and more seats. (www. continue until 2012, said chinaview.cn) Zheng Chaolong, director of the Zhuhai transportation bureau. U-Freight expanding in China “The highways will link harbors, airports and The U-Freight Group (UFL) is continuing to increase its presence in China through a range of checkpoints between Zhuhai strategic office openings and relocations that is working to consolidate its involvement in one of the and Macao, helping develop world’s busiest and most important freight markets. the city into an important The developments place the U-Freight group in a strong position to ensure a high profile in the transportation hub in the Chinese import and export markets. In China the company operates under a number of brands in- western PRD region,” Zheng cluding U-Freight China, Shanghai Rijin, Dalian China Express and Shanghai Renaissance. said. This year alone, the Not only do these openings and relocations allow UFL to take advantage of what it sees as Chi- city has earmarked 3.7 bil- na’s second phase of economic and industrial development, it looks to these developments to allow it lion yuan for urban provin- to increase its intra-Asian services into and out of China which it is confident can only improve. www.( cial highway projects, Zheng cargonewsasia.com) said. The work is part of the DHL opens $13m fashion centre in Hong Kong provincial government’s plan to accelerate domestic DHL has announced an investment of US$12.9 million in a new 120,000 sq ft DHL Global For- consumption by speeding up warding (DGF) office and DHL Fashion Competency Centre in Hong Kong. The Fashion Competen- infrastructure development cy Centre will develop bespoke logistics products and solutions, and house a core team of industry amid the global economic experts providing consultancy services to customers in North Asia Pacific. downturn, Zheng said. “By “The Fashion and apparel industry is Hong Kong’s second-largest export commodity worth over next year, about 152 km of $26 billion, after electronic products,” said Hermann Ude, Global CEO, DHL Global Forwarding. The new highways will be added investment is part of a series of initiatives by DHL to expand its presence in the fashion industry. Earlier to the city’s current traffic this year, DHL launched Fashion Centres of Excellence in India and Sri Lanka. (cargonewsasia.com) network,” Zheng added. He highlighted the importance of the proposed China Eastern parent gets US$293 mln aid Hong Kong-Zhuhai-Macao Bridge, which will be started The state parent of China Eastern Airlines has received an additional US$293 million in cash at the end of the year. assistance from the government, according to a senior company executive, Reuters reported. The 29.6-km bridge, “We have received the money from the government and will use it to ease the operational dif- which will be the world’s ficulties of the group firm,” Liu Jiangbo, vice president of China Eastern Air Holding told Reuters. longest sea link, will attract The group had injected a little over US$1 billion in cash it received from the government previ- 37.4 billion yuan in govern- ously into its loss-making listed arm through a share placement deal. Liu said she was not aware of ment investment and more any plan to inject the US$293 million to China Eastern Airlines. (www.cargonewsasia.com) than 21 billion yuan in bank loans. The city will also push on with renovations of the Panalpina scoops Huawei LSP contract Gongbei checkpoints linking Panalpina has been nominated by mainland telecom giant Huawei Technologies as prime logis- Zhuhai and Macao. tics service provider for their China-Brazil end-to-end business. “The renovation is to Under the three-year agreement, Panalpina handles all international air freight (several thou- meet increasing traffic de- sand tonnes) from China to Brazil as well as the full logistics services at destination including local mand after the bridge link- distribution and warehousing. ing Hong Kong, Macao and Furthermore, for all ocean freight movements into Brazil, Panalpina acts as back-up carrier. Guangdong is completed,” “This is an important milestone in our relationship with Huawei,” said Sandro Knecht, chief Zheng said. (China Daily) marketing and sales and supply chain management officer at Panalpina. “It adds to an already successful collaboration that has been continuously expanded over the past years. (cargonewsasia.com)

16 E nvironment

Increase farmers’ income, solve environmental problems

A senior Chinese official has called on forestry depart- ference (CPPCC). ments to boost the country’s forest development to increase Governments at all levels and all forestry officials should farmers’ income and cope with environmental problems. work harder to raise the contribution ratio of forestry to the Wang Gang, member of the Political Bureau of the Com- nation’s economic development and help farmers increase in- munist Party of China (CPC) Central Committee, made the come, he said. remarks in attending an opening ceremony of the sixth China The two-day forum was co-sponsored by State Forestry Urban Forest Forum held on May 7 in Hangzhou, capital of east Administration, the Subcommittee of Population, Resources China’s Zhejiang Province. and Environment of the CPPCC National Committee and Zhe- Development of forestry is a guarantee for ecological con- jiang Provincial Government. It has attracted more than 400 servation, said Wang, who is also vice chairman of the National attendants including 89 mayors at home and abroad. (Xinhua) Committee of the Chinese People’s Political Consultative Con- Chinese city gets back on its bike bike on its back gets city Chinese China targets early completion of In China’s bustling metropolises, rush hours are nightmares for office workers post-quake rebuilding each morning and evening. East China’s Hangzhou, known for its charming scenic China had invested RMB spot West Lake, is no exception. 360 billion (about US$52.7 bil- Every day, about 460,000 motor ve- lion) in post-earthquake recon- hicles, including 360,000 private cars, are struction as of April, one-third running in an endless stream along down- of the planned total, and hoped town streets of Hangzhou, the capital city to complete all work within two of Zhejiang Province. About 50,000 ve- years, a government official said hicles are poured in to add up urban freight at a press conference on May 8. flows each year. Car drivers have doubled According to Mu Hong, the average driving time from residential vice director of China’s National quarters in the western part of the city to Development and Reform Com- downtown offices. mission, most rebuilding of basic China used to be a kingdom of bi- housing and infrastructure had cycles. Today it sees far fewer bicycles begun and shown considerable progress. in metropolises, as affluent Chinese city The government planned to complete reconstruction before September dwellers have become fond of buying and 2010, after starting in September last year. The target was one year earlier than driving cars to offices. With a 1.3 billion previously expected. population, China had about 650 million “Reconstruction work has gotten off to a good start, as one-third of the bicycles, including 80 million electric- plan has been completed in one-fourth of the scheduled time,” Mu said. driven bicycles, while it had 65 million mo- The planned investment totaled about RMB 1 trillion and covered more tor vehicles at the end of 2008, according to than 200,000 projects. It included RMB 300 billion of direct investment from China Bicycle Association. the central government, of which RMB 154 billion had been already injected In addition to convenience, cars are into the rebuilding, Mu said. taken by many as a symbol of wealth. In With sufficient funding, reconstruction of essential infrastructure, such some cities, bicycle lanes are simply abol- as railroads, highways and airports, was able to be completed and the facilities ished in many quarters, leaving rooms for returned to service, he said. cars. Up to 95.7 percent of the reconstruction for rural houses had started, 76.6 But over the past year, public bicycles percent of which had been finished, according to Mu. have become the most convenient traffic Tang Kai, director of the urban planning department of the Ministry of tools for many Hangzhou residents. Public Housing and Urban-Rural Development, said rural residents in Sichuan Prov- bicycles are also loved by tourists for short- ince’s quake zone would be back in permanent houses by this winter. distance trips. Urban residents would be in new homes before September 2010, as 48.9 As the first of its kind in the country, percent of urban houses had been reinforced and reconstruction of 40.1 percent the public bicycle leasing service program of the destroyed houses had begun, with 8.9 percent finished. was introduced to Hangzhou a year ago to He said 98 percent of the factories and 95 percent of the shops had re- make bicycles a component of the city’s opened. public traffic mix. Schools had also been a focus of the rebuilding, as 70 percent of the stu- Besides, Hangzhou is planning to set dents were back in permanent schools, and the government vowed to have all up a public bicycle technology development students in permanent schools by next spring, according to Mu. company, to protect and promote its tech- The government had tightened supervision of the use of reconstruction nologies from the public bicycle service. funds, and so far there had been no report of misuse, Mu said, stressing the gov- To date, Beijing and Shanghai, to- ernment would also tighten supervision on construction quality. gether with Zhengzhou, Jinan, Wuhan, The National Audit Office (NAO) had conducted audits of more than 1,500 Changzhou and Sanya, are also stepping projects as of March 31, covering nearly RMB 50 billion. up efforts to build their own public bicycle There are about 1,600 auditors at construction sites in the quake-hit regions systems in response to growing energy tracing fund use in reconstruction projects. They are required to cover above 60 prices, environment protection require- percent of all the central funded and more than 80 percent of the total local gov- ments and traffic jams. (Xinhua) ernment funded appropriations, according to NAO. (Xinhua)

17 China forex reserve investments remain profitable nve s tment I Foreign in- China said on April 24 that its investments of foreign exchange reserves remained profitable last year despite the global financial crisis that sent financial assets shrinking in value, dispelling concerns of vestment in huge losses with such investments. China slows “We managed to get some proceeds from managing the country’s foreign exchange reserves last year, while at the same time maintaining the safety and liquidity of the assets,” Hu Xiaolian, head of the sharply in State Administration of Foreign Exchange (SAFE). China’s overseas earnings reached US$82.5 billion in 2008, up 8 percent from a year earlier, accord- 2008 ing to the country’s balance of payments statistics released on April 24 by the SAFE. Hu said “a considerable proportion” of such earnings were from investments of forex reserves, with- Foreign invest- out revealing specific figures. “Such earnings from forex reserves investment, though represented a lower ment, both to the finan- rate of profit from previous years, were hard-earned,” she said. cial and non-financial Hu said that diversified investments in different assets and assorted holding in various currencies sectors, was signifi- have played a major role in producing the proceedings. cantly down in China “The value of assets has been kept stable on the whole, as diversified investments in different assets last year, as foreign and currencies are highly complementary,” she said. (Xinhua) investors tightened their belts amid the global financial crisis, accord- China to launch more stimulus investment in Q 2 ing to the State Ad- ministration of Foreign The Chinese central government is expected to launch its third batch of stimulus investments in Exchange (SAFE) on large domestic projects in the second quarter to further boost its economy, according to the China Securi- April 25. ties Journal on April 21, citing an unidentified source. The combined The central government has so far cashed in a combined RMB 230 billion (US$33.8 billion) for its foreign direct invest- 4-trillion-yuan stimulus package announced last November to bolster the slowing economy, RMB 100 ment inf low to China billion in the fourth quarter and RMB 130 billion in the first quarter. was US$160.9 billion in The newspaper said the new money would continue to be poured in projects that could benefit 2008, up 8 percent from people’s livelihood, such as health and education sectors, big infrastructure projects, and housing for low- a year ago, but was 65 income earners. Previous investments were dedicated to similar purposes. percentage points slow- An official of the National Development and Reform Commission (NDRC) confirmed the new in- er, SAFE said in a re- vestment, but said the exact amount was not decided yet. The newspaper said the second-quarter invest- port on China’s balance ment might be a larger amount than previous ones, as the government hoped to consolidate foundations of payments in 2008. for a possible economic recovery with more investment and the summer is a good time for construction Foreign investors work. withdrew some US$13.1 “It’s good to cash in pledged investment as early as possible, because the economy is under deeper billion of investment, a downward pressure in the first half,” said Li Huiyong, a Shenyin & Wanguo analyst. The central govern- rise of 17 percent from ment has made arrangements on nearly 40 percent – RMB 230 billion out of RMB 590 billion-- of the 2007, but 16 percent- first half of its promised two-year investment, at RMB 1.18 trillion. age points less. The net “Early arrangement of such investment can leave room for new stimulus plans, if the two-year investment inflow was 4-trillion-yuan package does not work out very well,” Li said. China’s fixed asset investment picked up in US$147.8 billion, up the first quarter with an increase of 28.8 percent, which outperformed the annual rate of 25.5 percent last 7 percent but was 70 year. (Xinhua) percentage points lower than that for 2007. The financial sec- Review into investments by SOEs tor attracted US$14.7 billion while the non-fi- China’s state-owned asset regulator will launch an investigation into investments made by centrally nancial area drew 146.2 administered state-owned enterprises in the financial sector in a bid to help them avoid risks. billion U.S. dollars. A total of 28 SOEs, including Air China, China Eastern Airlines and China COSCO Holdings Co, East China remained have invested in financial derivatives but most of them suffered losses. The overriding concern of the the most attractive re- SOEs, when they invest in financial derivatives, is to ensure they avoid risks and not to speculate, said Li gion for foreign inves- Wei, vice director of the State-owned Asset Supervision and Administration Commission. tors. Mining, education Air China lost RMB 7.5 billion (US$1.1 billion) on fuel-hedging contracts by the end of last year, and residential service and China Eastern’s wrong-way bets on hedging dragged its revenue down RMB 6.4 billion. Li said industry were favored SOEs which plan to invest in financial derivatives must meet by foreign capital. The four conditions - abiding by hedging rules, hiring financial foreign capital use in institutions for consultation, controlling risks and getting the property, catering and commission’s approval. hotel sectors declined. “SOEs are short of financial talent to deal in such invest- Most of the finan- ments, which led to an underestimation of risks and viola- cial investment went to tions, so the commission will issue suggestions after an inves- the United States and tigation,” Li said. He also urged local state-asset regulators to Hong Kong, while the investigate locally administered SOEs. The SOEs have seen non-financial invest- their first annual decline in net profit last year since 2002, ment were made in diving more than 30 percent from a year ago to RMB 665.29 Asia. (Xinhua) billion. (Shanghai Daily)

18 F inance

Foreign investors share dumping has little impact on Chinese banks China’s Social Secu- The Industrial and Commer- cial Bank of China, the world’s rity Fund reports loss in biggest lender by market value, edged up 2.49 percent in Shang- 2008 hai and 4.61 percent on the Hong China’s national government pen- Kong Exchange, indicating that sion fund, the Social Security Fund the dumping of shares by foreign (SSF), reported its first annual loss since stakeholders had little impact on its founding eight years ago, losing 6.79 investor confidence. percent on its investments in 2008. Allianz Group sold 3.22 The loss mainly reflected last billion ICBC Hong Kong-listed year’s A-share market plunge, as the shares and American Express benchmark Shanghai Composite Index sold 638 million ICBC Hong tumbled about 60 percent, according Kong-listed shares Tuesday, as to the SSF’s annual report released on soon as a lock-up period expired. The ICBC A shares edged up 0.5 percent in Shanghai May 6. and H shares up 2.48 percent on the Hong Kong Exchange the same day. Realized gains in 2008 stood at Analysts said the investors had to sell their holdings to shore up capital amid the fi- RMB 23.36 billion (about US$ 3.86 bil- nancial crisis and it had nothing to do with a lack of confidence on Chinese bank sector. lion), against a nominal loss of RMB Professor Guo Tianyong, of the Central University of Finance and Economics 102.1 billion, the SSF said. In 2007, the (CUFE), said many financial institutions were suffering from the financial crisis and SSF recorded profits on its investment of some had to sell shares to relieve liquidity pressure. RMB 145.35 billion with a return rate of Bank of America sold part of its stake in China Construction Bank (CCB) on Janu- 43.19 percent. The SSF had total assets ary 7 and Royal Bank of Scotland Group (RBS) dumped all of its Bank of China (BOC) of RMB 562.4 billion at the end of 2008, assets on January 14. an increase of RMB 122.8 billion from On the other side, some investors indicated they would hold their stakes in Chinese 2007. banks. Goldman Sachs Group Inc., which owns 4.93 percent of ICBC’s outstanding Despite last year’s loss, the average shares, has agreed to hold on to 80 percent of that stake until at least April 28, 2010. It annual return from investment for the could sell the remaining stake anytime after April 28 this year. past eight years hit 8.98 percent, far ex- Michael Evans, vice chairman of Goldman and chairman of Goldman’s Asian op- ceeding the average annual inflation rate erations, said they prolonged the lock-up period because Goldman had confidence in of 2.35 percent. Its accrued investment ICBC and China’s economy and they hoped to maintain long-term strategic cooperation income since its founding had reached with ICBC. RMB 159.8 billion. HSBC, holding a 20-percent stake in Bank of Communications, has established The SSF would continue to im- close cooperation with its Chinese partner. HSBC has reiterated it would not cut its prove its risk control and invest more stake in Bank of Communications, which was locked until August last year. prudently this year, cutting down on Temasek Holdings and Asian Development Bank (ADB) said they would not drop fixed income products and expanding its shares in BOC in the first half. Bank of America promised to hold its stake in CCB for investment in private equity funds. Dai 120 days after selling other CCB shares on January 7. Analysts say Allianz and Ameri- Xianglong, chairman of the National can Express cut their holdings in ICBC through private sales to a select group of inves- Council for the Social Security Fund, tors, which would not affect China’s banking sector. (Xinhua) said last month at the Boao Forum for Asia in China that the SSF might invest in three to five private equity funds this China’s new loan growth may decline in April year. (Xinhua)

Credit extended by China’s banks in April may have dropped to above RMB 600 billion (US$87.85 billion) after staying at above RMB 1 trillion for three straight months, industry insiders said. Despite the sharp month-on-month decline, the scale and growth of the April new loans was “more reasonable” than that in the first three months this year, said China Se- curities Journal, citing unidentified sources with banks. China’s new RMB-denominated loans hit RMB 4.58 trillion in the first quarter, according to figures from the People’s Bank of China, the central bank. In March alone, new credit loans increased RMB 1.89 trillion. The country’s “big four” state-owned commercial banks, including Industrial and Commercial Bank of China, the world’s largest bank by market value, are estimated to have lent more than RMB 250 billion in April, while smaller banks have lent about RMB 400 billion, said the sources. Medium and long term loans would have accounted for a larger proportion in the April new loans, while the scale of bill financing would fall sharply, said analysts. It is also forecasted that new loans in May and June will not see a dramatic decline from the April level, according to Li Gang, expert with Agricultural Bank of China. The average new loans for the rest months of the year will be around RMB 300 billion, he said. (People’s Daily)

19 ulture

C Premier Wen Jiabao encourages Chinese to read more

Chinese Premier Wen Jiabao, an avid reader, encouraged citizens sightful writers and those that were well-written, as well to read more and be studious and selective in their reading on World as those that had stood the test of time. Reading Day, which fell on April 23. Books can not change the world, but people change Wen made the remarks when visiting a branch of the Commercial the world by changing themselves through reading, he Press and the National Library in Beijing on April 23. said. “I always believe that knowledge gives people not Books are the crystallization of human wisdom and reading is only strength, but also security and happiness,” he said. important in promoting an individual’s accomplishments and state of When visiting a branch store of the Commercial mind, improving citizens’ quality and strength, and shaping a coun- Press, Wen spoke highly of the role of publication. With- try’s future, he said when visiting the National Library. out the publishing sector, culture cannot be inherited, He said the promotion of reading was significant amid an unprec- scientific exploration would be halted and the historical edented global financial crisis. Overcoming this crisis requires not records would not exist, he said. only material power, but also spiritual power. He said fundamentally, When talking to the English editors of the press, he it needs people, the power of knowledge and scientific and technologi- said the Chinese publishers should not only take the role of cal revolution to conquer this financial crisis. promoting the construction of Chinese civilization, but also He also advised readers to be selective, choosing books from in- help spread the world’s civilizations. (Chinaculture.org)

America’s second National Kunming casts wide net for talent Chinese Language Conference Kunming is scouring the globe in search of the best and brightest young economists as the southwestern hub looks to transform itself into a modern city. opens in Chicago The “city of eternal springz” is looking for 40 economists to bolster its munic- More than 800 educators from through- ipal government staff. The government says it is looking for people with doctorates out the United States converged on Chicago in economics to work in sub-prefectural positions, such as deputy county chiefs, on April 30 to take part in the second National assistants to the directors of development zones and deputy directors of some mu- Chinese Language Conference under the theme nicipal departments, Kunming Daily reported of “Making Connections and Building Partner- It is the first time the city has looked to hire talent from overseas. ships.” The capital of southwest China’s Yunnan province is following the lead of Bei- The conference is sponsored by the Col- jing, Shanghai and Guangzhou, which have recently recruited from outside China lege Board and Asia Society, and hosted by despite the deepening global economic crisis. the Chicago Public Schools. Chicago is lead- Kunming has plentiful natural resources and is the leading transportation hub ing the country in Chinese language teaching, in southwest China, with a rail connection to Vietnam and road links to Myanmar with some 12,000 students enrolled in pro- and Laos. The local government wants to build Kunming into a modern and inter- grams in 43 schools. national city that is a center for trade, transport, finance and culture. Gaston Caperton, president of the Col- The city is hoping to attract people with experience in urban planning, finance, lege Board, opened the evening with a call for international trade and investment. increased interaction between American and China has recently recruited talent from overseas but many are sourced to Chinese students and educators. work at scientific institutions and universities and few have been taken on to work “We need more than an Internet connec- as public servants. tion,” he said. “We need to make a real human In the past 15 years, more than 4,000 scholars and researchers have been at- connection. China has emerged as a politi- tracted by the Chinese Academy of Science’s 100-Talent Scheme and the Ministry cal leader on the world stage, and there is a of Education’s Yangtze River Scholar Scheme. (China Daily) growing urgency for more Chinese programs in American schools. An appreciation of the Landscape of foreign cultures restored at need to understand the Chinese language and culture is expanding quickly across the great world heritage Lushan United States.” Chinese Consul General to Chicago Cooling, a street on world heritage site Mount Lushan in eastern China’s Ji- Huang Ping said that the work done at the con- angxi Province, re-opened to tourists in the May Day holiday after a restoration ference could make a cake of the language and project, an official with the Lushan administration confirmed on May 3. culture that would give everyone a bigger share. With an altitude of 1,164 meters, the street, which got its English name for its He said that of the top 20 Confucius Insti- cool and cozy climate, has won fame for villas alongside with different styles from tutes in the world, which are non-commercial more than 20 countries. institutions for teaching the Chinese language “he project aimed to restore the landscape of the 1920s along the street. To and promoting Chinese culture abroad, four achieve the goal, project undertakers consulted historical documents and used were in the United States — three of them were wooden and stone materials that had been in vogue then to revive the time-honored in the U.S. Midwest and the number one insti- architectural genres,” Fan Yunjiang, head of commerce management with the tute was the Confucius Institute in Chicago. Lushan administration, said so. Chicago Mayor Richard M. Daley, who The project costs RMB 10 million (US$1.5 million), Fan added. was an early advocate of teaching the Chi- Since 1895 when a British missionary bought 53.3 hectares of land at Cooling nese language and culture in the city’s public to develop real estate for holiday purpose, a group of villas with Russian, British, schools, said at the opening ceremony that ed- American, French, German, Italian, Japanese, Swedish, Danish, Norwegian and ucation comes first, and Chicago is dedicated Portuguese styles had been built till the 1920s. to the world’s languages and cultures. (Xinhua) Mount Lushan was ranked as a UNESCO world heritage site in 1996 and included into the world geological park list in 2004. (Xinhua)

20 H ealth

China tries to locate all having close contact with suspected case of A/H1N1 flu WHO’s tally of More than 130 of 150 passengers aboard the same flight with the Chinese mainland’s first sus- A/H1N1 influenza pected case of A/H1N1 influenza, have been found and put into quarantine, according to a press conference on May 11. cases rises to The 30-year-old man surnamed Bao, who had been tested “weakly positive” to A/H1N1 virus twice by the Sichuan Center for Disease Control and Prevention (CDC), was “conscious and in sta- 4,379 ble condition,” according to a press conference held by the Chengdu Municipal Government hours As of 0730 GMT on May after a suspected case of A/H1N1 influenza had been found in southwestern Sichuan Province. 10, 29 countries have officially Bao’s temperature was under control and “his basic vital signs such as pulse and blood pressure reported 4,379 laboratory are normal,” the press conference heard. confirmed human cases of A/ “At present, the Sichuan Province and relevant departments of Chengdu are stepping up efforts H1N1 infection, the World to search and trace (all the people who had close contact with Bao) and enhance prevention and con- Health Organization (WHO) trol efforts so as to find all the people having close contact with him as soon as possible,”it said. said in a latest report. The Chengdu health authorities received a report on May 9 night from the city’s CDC that the Mexico, the epicenter Sichuan People’s Hospital reported a flu case from the United States which could not exclude the of the outbreak, has reported possibility of A/H1N1 infection. 1,626 confirmed cases, includ- It then immediately sent specialists to the spot to conduct an epidemiological investigation, and “ini- ing 45 deaths. tially diagnose it as suspected A/H1N1 influenza case” based on Bao’s symptoms and laboratory tests. The United States has re- The Ministry of Health (MOH) announced on May 10 night that the first suspected case of A/ ported 2,254 cases, including H1N1 influenza was found in the Chinese mainland. two deaths. Bao, a native of Sichuan’s Neijiang City, was a student of the University of Missouri in the United Canada has reported 280 States. He arrived in Chengdu before returning to Neijiang, according to the press conference. laboratory confirmed human On May 7, Bao arrived in Tokyo from St. Louis via St. Paul of the United States. On May 8, he cases, including one death. traveled on flight NW029 from Tokyo and arrived at the Beijing International Airport on May 9. He Costa Rica has reported then flew from Beijing to Chengdu on flight 3U8882 the same day, the ministry said. eight confirmed cases, includ- The MOH said Bao developed symptoms of fever on the flight from Beijing to Chengdu accom- ing one death. panied by sore throats, coughing, stuffy nose and sneezing. He went to the Sichuan People’s Hospi- The following countries tal after getting off the plane, accompanied by his father and girlfriend, by taxi. have reported laboratory con- Bao’s girlfriend, his father and the taxi driver had been put into quarantine, it said, adding they firmed cases with no deaths: received “considerate and sound” services. Argentina (1), Australia (1), All the people put under medical observation had been “properly arranged by the government,” Austria (1), Brazil (6), China’s it said, adding five medical experts sent by the MOH had arrived in Chengdu Hong Kong (1), Colombia (1), Yang Wei, director of the Chengdu Health Bureau, said a series of emergent measures had been Denmark (1), El Salvador (2), taken, including conducting terminal disinfection on the Sichuan People’s Hospital’s fever outpatient France (12), Germany (11), section and putting relevant medical staff under medical observation. Guatemala (1), Ireland (1), Yang said the bureau had reported the case to the superior department and tried to search and Israel (7), Italy (9), Japan (4), trace the vehicle Bao had taken and the passengers. the Netherlands (3), New Zea- “Local health authorities should step up prevention and control efforts and apply strict home land (7), Panama (3), Poland medical observation measures to people who had close contact (with Bao). They are not allowed to (1), Portugal (1), Republic of go out during the observation period,” he said. Korea (3), Spain (93), Sweden Local community health service centers or village clinics would conduct daily inspection, in- (1), Switzerland (1) and Britain cluding taking their temperatures and observing symptoms and physical signs, he said, adding a list (39). of people who had close contact with the patient had been distributed to local CDCs. The WHO has said that The bureau asked local governments to designate more hospitals in order to handle more wide- it currently has no plan to spread epidemic and enhance screening of fever outpatients in all hospitals in Chengdu. (Xinhua) raise its pandemic alert level to phase 6, the highest level which means a global pan- Analysts: “no impact” yet from A/H1N1 flu for China’s economy demic is underway. To raise the alert level, Though outbreaks of A/H1N1 across the world have China on alert, economists said the flu there must be enough evidence isn’t having much impact on the Chinese economy. to show that community-level Tourism and exports are considered most vulnerable to disruption, but operators said their busi- human-to-human transmission ness has not been seriously affected. of the new virus has occurred Wang Yuan, manager of the domestic tourism division of China CYTS Tours Holding Co., in regions outside North Ltd., said: “There is no obvious change in domestic tourism. It’s safe in China and people have not America, it said. changed their travel plans.” The WHO said, however, Liu Jie, a business manager with Sino-Right Investment and Development Group Ltd., a Bei- that it was closely monitor- jing-based export company, said: “Our construction projects in Mexico would have to be postponed ing the situation in European as many workers are staying home. If there was other business there, we would not dare to take it countries such as Spain and and would have to postpone it and wait. Britain, which have reported Zhang Yansheng, head of the foreign economy research institution with the National Develop- the largest numbers of cases ment and Reform Commission, said: “The impact of the A/H1N1 flu on the Chinese economy is outside North America. (Chi- limited.” naview) “The flu so far has not damaged the economy as SARS did in 2003,” said Zhang, “If there was any impact, it would be on the expectations of consumers and investors.” (Xinhua)

pe c ial report S Chinese Opportunity for Outbound Investment ?

Yang Wei

lobal economic crisis shrinks the world wealth, as well as the enterprises value. Many companies in foreign lands are facing a tough time. China, with the world No.1 foreign exchange reserve, US$1953.74 billion up to March, 2009, according to State Administration of Foreign Exchange of China, is claimed to possess strong outbound investment capacity in the crisis. Government officers andG scholars from home and abroad voice that crisis has brought China the best time to launch effective outbound investment. How will the enterprises think though? A survey conducted by CCPIT releases a current profile of China’s outbound investment, based on investigation of 1,104 Chinese enterprises. According to the figure, up to the first quarter of this year information technology industry boasts the largest proportion, 50%, for outbound investment. And 40% of the construction enterprises, 30% of enterprises in natural resources exploration, and 30% agriculture enterprises in the survey showed their outbound investment background. Overseas enterprises involved in manufacturing is their Chinese peers’ first choice on the road to the outside world, followed by trade, and natural resources exploitation, transportation and processing. And this preference rank will remain the same for quite some time in future. The survey shows that the first investment destination in Chinese enterprises’ eyes is the East and Southeast Asia (including Hong Kong SAR and Macao SAR) , and 60% of the enterprises claimed to have invested there. North America, West Europe and Africa are next. And this trend is basically unchanged according the future intention investigation. Chinese enterprises express that to expand international market is their main objective of foreign investment, and also to acquire foreign advanced technology and management experience. To lower the cost, take advantages of natural resources of the destination countries, usher international famous brands and avoid trade barriers are also the heating reasons attracting Chinese entrepreneur to march forward towards global markets. Actually, the worldwide spreading financial crisis posed significant affect on the foreign investment intention of Chinese enterprises. According to the survey, more than half of the enterprises suspended their willingness in increasing foreign investment capital ever after the financial crisis. Nearly 18% of enterprises are like to transfer investment destinations or industries. Only 7% of the investigated enterprises still showed their interests in enlarging foreign investment scale in the present circumstance. Though every road leads to Rome, may not every road is smooth. In the advocating of “Go-abroad” strategy, what steps and measures will Chinese government and enterprises take in the following time? Special Report this issue has more.C

24 hen most Chinese enterprises are feeling the chill of financing difficulties arising from exportation crisis, is “going-out strategy” can really strike a chord with their hearts and attract them to invest Wheavily overseas? Mr. Wang Chao, Assistant Minister of Com- merce told China’s Foreign Trade, vast opportunities are there for those prudent yet active “Going-out” Enterprises. They should have confidence to seek fortune on the basis of the simulative and risk-averse policies from the government. “Despite the protectionism arising from financial crisis, we also face the valuable opportunities for outbound investment. A prudent yet active attitude towards the crisis might be the best choice. Neither wishing to survive through negative hibernation nor bottom fishing without concrete analysis is a reasonable solution, in my opinion. In other words, actively adjusting developing strategy to seek opportunities from crisis on the basis of enhancing the crisis manage- Wang Chao, Assistant Minister of Commerce ment is welcome in current situation.” said Wang when addressing the 3rd Chinese Enterprises Outbound Invest- ment Conference MOC: on April 22. He explained that,“On one hand, Vast Opportunities External environment is changing. Firstly, financial for “Going-out” Enterprises crisis increases the demand of invest- Guo Liqin ment from China. It made these countries relax the limitation in some fields, easing the barriers to China’s merger and acquisition national condition, trade-related legal information and invest- in overseas market. Secondly, many counties launches economy- ment opportunities. This information is expected to publicize boosting plan with great amount of capital which can also be con- on the website of ministry of commerce. All in all, the service sidered new opportunities. In addition to that, many states have system to integrate public service, operational management and great desire to cooperate with us in environmental protection decision support to aid the enterprises with “going-out” strategy and energy-efficient building, green economy, brand manage- are established to serve enterprises. ment and business networking. Finally, the financial crisis pushes The Ministry of Commerce takes advantage of multilateral some countries to reduce the expenditure on foreign aid. In these consultation mechanism to enhance the exchanges with govern- circumstances, enlarging foreign aid to some extent can not only ment of host countries in order to aid the Chinese enterprises in help those countries in need but lay great foundation for tapping overseas market cope with the difficulties and protect their over- into markets of developing countries.” seas assets. In recent years, overseas security emergencies are on “On the other, some ambitious enterprises desire outbound an upward trend, the Ministry of Commerce formulated the con- investment. Currently, our GDP per capita is exceeding US$3000, tingency plan to respond to it. It has also signed 130 investment foreign exchange reserve is approximate 2 trillion, a great number protection agreements, 14 bilateral labor cooperation contract and of enterprises which are able to invest overseas crop up. They have actively step up the free-trade zone negotiations and establish- great desire to introduce advanced technology, tap into interna- ments of overseas economic and trade cooperation to constitute tional market, and upgrade the industry. However, our outbound new platform for “going-out” enterprises. investment is in a very initial stage and has great potential to devel- All in all, facing the perplexing international economic situ- op, only account for 0.76% of international market in 2007.”Wang ation, “going-out strategy” is not alone. It should be combined added. with boosting external demand, stabilize exportation and enlarge With regard to the governmental support, the Ministry of internal demand. It is a long-term preparation for tapping into Commerce adopted a series of policies in finance, credit, insur- international market. Wang reminded the enterprises to realize ance and tax to help enterprises deal with difficulties when going the opportunities brought about by the fluctuations of market and out. They encourage the policy banks and commercial banks to relative stimulating and risk-averse policies issued by the govern- provide loan support. They also organized China International ment. “Now, many countries invest heavily on the infrastructure fair for Investment &Trade, China Harbin International Econom- and welcome our cooperation, since western contractor is shrink- ic and Trade Fair, China-ASEAN Expo, and China Engineering ing their operations, our enterprises will have more opportunities & Technology Expo to boost investment. As a follow-up of Pre- to tap into emerging and high-ended market. Besides that, the mier Wen’s “Trip of Confidence” to Europe, they actively seek price dropping of raw material and logistics to a great extent in- cooperation opportunities in Europe. Recently, their delegation crease our room of gaining profits.” Wang stressed. of executives to investment in the United States is a strong signal The Ministry of Commerce is mainly responsible for admin- that China is willing to face the challenges through open market istering China’s foreign trade, economic cooperation and foreign and investment. investment, and for establishing the “going-out strategy” policies. Except for publicizing report of trade and investment as well This strategy fully raises the level of opening to the outside world as industrial guidance index, they also compose the policies and and promotes the participation of enterprises in international statistics classified by countries. It involves more than 160 coun- economic cooperation and competition in a larger scope, a wider tries and regions, providing target countries’ current fundamental range and a higher level.C

25 Special report 26 month’s decrease is much lower than the first two months of of 9months. cent months two re of maximum the is first capital foreign of the use actual the and than 2009, lower much is third the decrease But month’s 20.6%. of decrease year-on-year a with first used, ally the actu For is investment down. foreign slowed of US$21.78 billion 2009, rate of quarter growth the but size, certain a Special policy for “Going-abroad” for policy Special 2009 since disbursement and receipt exchange foreign The export trade has some signs of turning better. of turning signs some has trade export and China’simport data, basic these from Judged points. centage 9.1per and points percentage re 4 points, respectively percentage is 6.3 by March duced in value import the and value, the export value, export import& the of decrease negative the however,showed trade growth, import and export that month fifth the is March US$62.34 is billion. surplus trade the of and 24.9%, crease de year-on-year a with US$428.739 is billion, export and import of value gross the 2009, of quarter first Forthe declined. has plus difficulty offinancing since 2005. Firstly, making banks offer se Exchange the ease and Foreign support to of policies ofseries a out launched gradually Administration State the issue, tough the financing abroad, at with encountered are they problem biggest follows: as just concretely it embodied And down. slowing is growth trade surplus the although kept, still is international surplus China’s outflow. capital large-scale of enon capital inflows still maintains a certain size,and still no phenom of slowdown the and capital’sforeign major flow-inone. is a disbursement, and for the receipt in exchange appeared eign changes some crisis, of impact financial the ongoing the with especially situation, financial and economic billion, with a year-on-year increase of US$6.7 billion. increase ayear-on-year with billion, US$41.7by increased reserves exchange foreign march, In year. billion, US$7.7 by last of period same increased the US$1,746by comparing billion decreased reserves 2009 of quarter first the which of US$1,950 is billion, reserves exchange foreign state the 2009, March, of end the By speed. lower a at despite increase, to of 27.24 percent. increase year debtof balance reached US$280.043 billion, representing a year-on-increase foreign an short-term which of year, previous the representing 18.29%compared billion, US$441.952 to amounted debt foreign China's 2008, September, of end the By rate. growth — State Administration ofForeignExchange Aiming to help the foreign-invested enterprises to solve the the solve to enterprises foreign-invested the help to Aiming Thirdly, Secondly, all, of First foreign of amount total the however, speaking, Generally domestic and international the by influenced 2009, Since In the mean time, the foreign exchange reserves continued continued reserves exchange foreign the time, mean the In Delivered by Sun Lujun, Vice Director General from Capital Department of of Department Capital from General Director Vice Lujun, Sun by Delivered Figures from State Figures fromState the foreign debt still keeps growing with a certain certain a with growing keeps still debt foreign the the actual use of foreign capital still maintains maintains still capital foreign of use actual the the increase in the import and export trade sur Administration ofForeign Exchange ------tal Department of State Administration of of Exchange Administration Foreign State of Department tal Capi from General Director Vice Lujun, Sun Foreign Exchange and banks and enterprises largely lower the the lower cost. largely enterprise and time examination enterprises and banks and Exchange Foreign of Administration State over network new a the building of Also, performance management. the of effectiveness the enhancing greatly audit, electronic into audit manual the al turn has means which Exchange use, into module Foreign management of investment overseas the put ready Administration State The flow. capital cross-border for mechanism warning early and statistical detection the improve to and investment overseas for exchange easier. much investing the make and procedures verification the simplify to time, mean the In members. outside for its loans offer to institutions domestic sound, a form to frame. regulation standard fairly Institutions, automated, Domestic from Investment seas ex aspects. following the in foreign investment for overseas ofchange reform the deepen of further will Administration Exchange State Foreign the situation, market international rent enter by welcomed governments. widely local and prises been have and reduce costs, to them financing helped the enterprises, foreign-invested the for ing Thirdly, Secondly, First, cur the with combining and achievements, good the With to promote the introduction of introduction the promote to to further improve the management of foreign foreign of management the improve further to to offer more favorable terms upon allowing the the allowing upon terms favorable more offer to C Regulations on Over on Regulations - means of financ of means new a provided thesepolicies ofmentation enterprises. private for ment manage change ex foreign and loans the overseas ng i m refor for Ningbo in pilot test the up set to is third the And prises. enter overseas their for loans f o offer to s r groups e b m e m eligible allow to is second financing.The enterprises’ foreign-invested for policy ment manage curity The imple The ------Suggestion from NRDC for China Guo Yan Overseas Investment

ccording to the primary statistics, till the end of 2008, vestment of several billion US dollars come up one after another. non-financial investments from China totaled US$140 Second, the field of investment is expanding. Now the in- billion or so, involving 170 countries and regions in vestments from Chinese companies are no longer limited to trade the world. Through investments and cooperation, processing industry and small-scale processing industry, and ChineseA companies extend their operations into global market, expanded to mineral resources development and home appliance diversify their business and improve the level and technology manufacturing industry, infrastructure and high and new tech- and management, and also the international competitive ability. nology and so on. The investments now are going to the fields Meanwhile, they contribute to local economic development by that closely related to local economic development. bringing job positions and taxes, and boosting the construction Third, the investors are diversified. With various economic of infrastructure like education, sanitation, transportation and so entities are growing strong, the private companies are showing on. The boom of companies and the improvement of the public their strength, though state-owned companies still holding the welfare are spoken highly by local government and people. The leading position. In 2008, investments from private investors take National Development and Reform Commission (NDRC) play an a share of 30% of the projects above the designed size. The joint important role in the economic construction in China, and are di- ventures in a third country with other companies from developed rectly responsible for giving approval and carrying out these key and other developing countries have got a good start. economic and trade cooperation projects in overseas. On the third Nowadays, the international financial crisis is still deepen- Symposium on Transnational Investment of Chinese Enterprises, ing its influence, shaking economies in every country and re- Liu Hongkuan, vice director of Department of Foreign Capital gion, as well as the transnational investments. According to Liu Utilization and Overseas Investment of NDRC gave an introduc- Hongkuan, with the deepening and expanding global financial tion of the transnational investment of Chinese companies, under crisis, some countries are taking measures of trade protection- the topic Government Should Guide and Boost the Investment ism, setting barriers to transnational investments and damaging and Cooperation in Overseas. the smooth international trade and economic cooperation. Due to The situation of the transnational investments by Chinese the financial crisis, global economic growth slowed down, which companies is characteristic in four sectors as following: lead to a weak market and drop in product prices, causing op- First, the investment increases quickly. In 2003, the non- eration problems of some companies. Meanwhile, due to a tight financial investment from China totaled US$2.85 billion , and the credit, companies have come with cash flow problems, as they number increased to US$40.65 billion in 2008, with the growth have difficulties in funding. Chinese companies are facing the rate in the five years averaged 70% per year. Meanwhile, the size same situation, affecting the capability of direct transnational in- of single investment project expands too, and projects with an investment. However, the crisis also means opportunities for direct oversea investment, as there are many low-priced stocks of good quality in the market. And due to the order or financial difficulties, some companies are forced to sell assets or technologies. Through investment and cooperation, the companies can expand themselves, and also help to improve the market confidence and steady global economy. Under the current background, Chinese central government encourages companies capable of investing in overseas. Compared with the utilization of foreign capital, overseas investment and cooperation is just at its beginning. Companies should, under the direction of market, actively and steadily carry out the investment and cooperation projects in overseas, as the mainstay. Liu gave proposals to Chinese companies on oversea investment and cooperation as follows. First, invest into the key sectors, such as joint projects in resource or energy-related fields. On the base that base in domestic market, saving comes first, we should strengthen the joint development in oversea oil, natural gas and other important mineral resources, carry out long term trading policies, expand the channel and fields for oversea joint projects. Through mutually-beneficial joint projects with related countries on energy resources, China should share the opportunities for development, realizing together economic growth. Second, carry out technological and intellectual cooperation. To encourage innovation and improve the core competitive Liu Hongkuan, vice director of Department of Foreign Capital ability, we would like to see companies with strength to establish Utilization and Overseas Investment of NDRC R&D centers in US, Europe or other regions with an advantage

27 Special report 28 crisis, while going out to participate in the international market, market, international the in participate to out going while crisis, people. for local job positions more ate cre as well as services, industry, service ofother level and and quality the improve shipping management, fund banking, distribu tion, in engage to enterprises qualified encourage we concen trated, and strong relatively are China in service- companies other providing and transportation, telecommunications, finance, regions. or countries these with relationship the promoting on, so ment, and cooperate on public projects like sanitation, school and environ investment local improve helping projects, construction infrastructure other and conservancy, communications energy, water transportation, participate actively construc these should risks, companies the tion control can If market. world the in won have fame companies construction construction engineering Chinese and infrastructure in progresses astonishing made has Wang Li, deputy director of State Administration of Taxation of Administration State of director deputy Wang Li, L structure. of industrial and modernization adjustment the boost and brand international an establish to network, andmarketing bases production field,andconstruct this in of advantages take can companies these So world. of current factory the or center manufacturing as known is China China. in companies. local and Chinese oflevel innovation and technology the uplift cooperation, lectual intel and technological through And resources. technological in i Zhen Facing the background of global financial and economic economic and financial global of background the Facing Fifth, Fourth, Third, globally locate the service-providing companies. The The companies. service-providing the locate globally expand market for advanced manufacturing industry industry manufacturing advanced for market expand take advantage in infrastructure construction. China China construction. advantageinfrastructure in take Tax Policiesand the“Going-out” Strategy the“Going-out” ------cal partners’ legitimate rights and interests,” stressed Liu. Liu. stressed interests,” and rights legitimate partners’ cal lo and employees’ the protect and responsibilities, social the necessary fulfill investments, for promises their keep rules, and laws local conveniences obey should make they companies, to the For companies. on, out-going those forso and insur quarantine social and inspection cooperation, ance, economic assistance, legal tax- mutual protection, promotion free, investment on cooperation agreements signing and investment mechanism multilateral and bilateral ing establish by governments, between cooperation government the central strengthen will The on. so and affairs foreign against together companies the unit and asso industry the regular on Industrial work should etc. ciations services, certification and consulting, property financial, intellectual legal, provide and bridge, a them as let role and their play organizations, and agents investment-related oversea R&D, the and companies. world famous transnational new globalize breed to products, of sale mechanism, and production policy-making management and structure, system company in improvement through China, and outside projects cooperation and investment out carry capability to of companies joint-stock and private encourages also government the companies, state-owned these besides that, said and Hongkuan Liu smooth last, a At cooperation. secure and investment business and oversea safe the on management, risks insist plans, strengthen rules, investment detailed make various and risks, situation oversea the of aware be de and plans, velopment strength their consider fully should companies Chinese “The government should make favorable policies for these these for policies favorable make should government “The tion of Taxation, made a speech at the confer the at speech a made Taxation, of tion current depression times. At the conference, conference, Wang the Li, deputy At director times. of State Administra depression the under current attract especially in investment, foreign important ing extremely are tool, becoming macroeconomic basic a as policies, Beijing. 22, April on Conference Investment Outbound Enterprises Chinese Third some the at side their provided from solutions Taxation of State China’s Administration strategy? “going-out” panies’ com Chinese facilitate polices to of released kind be should What easily? more strategy “going-out” the implement Chi can How enterprises nese before. ever than has tougher country become the outside invest to enterprises domestic Chinese for road the 2007, in crisis financial the of outbreak the since But eration. coop and trade international in role significant increasingly tremendous an playing are they such that influence exerted and competition, I In an increasingly global economy, tax tax economy, global increasingly an In begun to participate in international international in participate to begun actively have and enterprises more Chinese more economy, China’s of develop ment rapid the with years, recent n C ------ence which briefly introduced China’s tax regime with respect to the contracting states. By the end of March in 2009, China has the implementation of the “going-out” strategy. signed tax treaties with more 90 countries among which 88 of According to Wang, a fundamental function of tax policy is them have come into effect, dramatically illustrates that a favor- to optimize the allocation of various economic resources among able international tax law framework has been gradually putting different companies and regions. It is a vivid example of such al- into place. location that tax policies are enacted to promote outbound invest- Thirdly, tax services have been greatly improved so that ments. In particular, under the current financial crisis, domestic domestic enterprises can easily implement “going-out” strat- enterprises should fully take the advantage of international egy. Tax services related to enterprises that want invest outside market for further development. Among other things, tax policies include three aspects, namely contracting tax treatment, tax display a significant role in this process. putes settlement and tax policy information service. For contract- In recent years, the State Administration of Taxation has ing tax treatment, Chinese government has made a more concise been making efforts to help Chinese enterprises to go out. At the sample of tax resident ID certificate and informed all contracting meeting, Wang presented a brief introduction of what the State states at the end of 2008. For tax disputes settlement, the State Administration of Taxation has done as follows: Administration of Taxation stipulated in 2005 that tax disputes Firstly, great improvements have been made in tax policies, be co-settled between the State Administration of Taxation and thus creating a desirable institutional environment for domestic tax departments in contracting states which has been proved to companies to invest outbound. For instance, tariff and income be an effective way of dealing with international tax disputes. In taxes are mainly imposed on import-export enterprises. There- the light of tax information service, the State Administration of fore, tremendous support has been given to these enterprises such Taxation has timely updated information in terms of domestic tax as deduction policy towards companies that export equipment policy and changes of foreign tax system which makes domestic and accessories, expanding the deduction coverage of value- enterprises flexibly adjust their own strategies. added tax towards enterprises that import fixed equipments and Realizing that more work needs to be done to help domes- tax refund after depreciation for companies using their own tic enterprises, Wang also introduced the work priorities that equipments. In addition, since the New Enterprise Income Tax the State Administration of Taxation would do in the future. Law was promulgated on January 1 in 2008, new rules have been Firstly, further improve domestic tax policy. In the meantime, released in terms of loss-making of income derived overseas and reinforce tax treaty negotiation to construct international tax law deduction policy of income derived overseas. As a result, taxes framework. Secondly, improve tax services for enterprises that that enterprises paid outside the country are allowed to deducted are willing to invest in foreign countries, especially tax service in the calculation of domestic taxes to a certain amount. What including foreign tax policies and management and tax disputes is more, the new enterprise income tax law has also included settlement. On the other hand, construct an effective tax infor- indirect deduction coverage which means that income derived mation feedback mechanism so that tax services can be tailored overseas by domestic resident enterprises can also be deducted. for more enterprises. Thirdly, strengthen tax management for All the policies mentioned above prove to be a reflection that the outside investments of domestic enterprises, especially applica- government is fully pledged to encourage and support domestic tion and inspection of income derived overseas. Fourthly, closely enterprises to go out. cooperate with various departments including tax departments Secondly, the role of tax treaties has been reinforced, provid- and other government departments. Tax service and manage- ing a good international tax environment for domestic companies ment for domestic enterprises that are ready to invest outside to invest outside. Tax treaties are important in safeguarding na- need cooperation among various departments. At the moment, tional tax interests and that of enterprises. In recent years, China the State Administration of Taxation has actively established an has enhanced its efforts to strengthen tax treaty negotiation for information-sharing mechanism with the Ministry of Commerce, promoting “going-out” strategies. In this process, more empha- National Commission of Reform and Development, the State sis are placed on protecting the interests of resident enterprises, Administration of Foreign Exchanges and CCPIT. In addition, thus helping domestic enterprises to lower tax costs, expand their further cooperation will be expanded with foreign tax authorities. influences and seize more market shares. For instance, when af- Under the current background, it is necessary that tax informa- firming tax obligations, domestic enterprise does not have to pay tion be exchanged among different countries. “Only in this way taxes if it is not confirmed to be a standing body. As far as the can we better deal with international tax disputes and together non-discriminatory rules are concerned, domestic enterprise in create a international tax environment for enterprises to carry out contracting states should enjoy the same treatment with that of the ‘going-out’ strategy,” Wang concluded. C

Hong Kong - Ideal Access For Mainland Enterprises

Guo Yan

ith the deepen economic integration between and mainland enterprises collected the investment in Hong Kong mainland China and Hong Kong SAR, more and has reached the scale of 22.1 billion HKD. In March of 2009, The more mainland enterprises choose Hong Kong as Management Method of Investment Abroad issued by Ministry their platform to enter the international market. of Commerce also provides the great convenience for mainland WAt the end of 2008, more than 3,800 mainland enterprises have investors. China’s Foreign Trade invited Ms. Wong Hoi Wan, invested in Hong Kong with the total amount of US$20.7 billion; Charmraine, Associate Director-General of Invest HK to intro-

29 Special report 30 shrinking in Europe and America. Then, they start to looking for looking to start they are Then, America. market and Europe in the many shrinking crisis, as, the by Such now. affected Kong were Hong companies in overseas interested are of lot a before, enterprises than cautious more are companies some though that explained Wong crisis, financial the by impacted been have offices there. the up set also Futures Green and Bank Beijing 2008, In inHongKong, offices opened past law firms the mainland nine years, in two additional, In Securities. Huatai and Steel Su Gome, Group, Tang, Haier Ren Group. Tong Hope Beijing New Tongfang, Tsinghua instance, UFSOFT, for HK, Invest of assist the mainland there. markets expand Hong Kong and in up set China to 200 enterprises than more assisted successfully have they important 2000, in increasingly establishment their an Since Kong. Hong Invest for become market has the China of 20% for Mainland accounted total. investors mainland the the Till 2008, of Guangzhou. end and Chengdu Shanghai, Beijing, in lished estab been have branches years, five past the In customers. land problems.” the solve to them assist to service follow-up the supply to close keep still we the management, their of invite progress the in to media; the them officials, help we ceremony, opening the At en the terprises. and Government the between connection the bridge and trademarks, registered visas, work estate, real and accounting of information the firms, law institutions, vari ofintermediary levels, kinds ous wage regulations, and laws data, economic Kong’s in invest to Hong including ready information, and advice provide enterprises we Kong, Hong the when consulta the stage, them early give the we at tion instance, for process, the “During added, She rate. tax lowerenjoy also regulations, international of get knowledge good bands, their building develop in and stronger horizons their expand could well investors as mainland center, logistic as center service business and trade center, financial tional interna as Kong Hong to owning investors, mainland For hours. four or three within places other and Singapore Tokyo,Vietnam, is convenient to reach Asia-Pacific major citiesincluding Beijing,it location, regional and geographic superior a as and China, land main into entrance good a is Kong Hong investors, Hong overseas of For Kong. position the for different investors distinguished HK Invest network. communication vanced ad and simple rate, tax low and system funds, tax and flow information of free system, judicial pendent inde oversightbodies, transparent and stable area, Asia in investment good foreign of attracting for performance advantage its with mainland China and inter companies for national access ideal an is Kong Kong. Hong in opportunities for investment looking are who those for assist the a of providing and hub advantages, of variety business and investment Asia’s as Kong Hong promoting for responsible is Government, Region Administrative Special Kong Hong perspective. investment the as well as Kong Hong in prises enter mainland of development the environment, investment HK duce Concerning the issue whether the mainland enterprises enterprises mainland the whether issue the Concerning under Kong Hong in invest companies mainland Many main no was there initially, 2000, in up set was HK Invest that out pointed Wong Ms. Hong that introduced Wong the of department a HK, Invest - - - - - sociate Director-General of Invest of HK Director-General sociate As Charmraine, Wan, Hoi Wong Ms. ------the win-win situation.” win-win the create together would we development, economic mainland rapid with coupled system, legal sound and infrastructure world-class network, international an with coupled world, gathering the around marketing, experts and finance in experience international of partners, premises. and clients business identify to and associations industry relevant meet to market, the understand better to Kong Hong in up setting considering seriously are that companies allow will programmes tailored These Kong. Hong to visits business-focused of series a stage. international the on business a growing successfully on tips and guidance offering sector private and government the from speakers with issues tical using strategy, business overseas Hong Kong as a stepping stone.an will focus The seminars on- prac develop to tools informa and the tion with companies local equip to designed locations, net its partners. to government and of industry works opportunities business on information will distribute Centres also Service Kong Hong Invest Kong. Hong in tunities oppor highlighting seminars large-scale by followed campaign, editorial and advertising nationwide will targeted stage carefully This a Kong. include Hong in opportunities business of POEs of class growing China's Mainland the among awareness raising enterprises. mainland for Kong Hong to visits business-focused and workshops includes campaign The SAR. HK the People’s in Central of the Government Office Liaison the of Com Department of Affairs Economic the Ministry and merce the with partnership in is nationwide campaign three-year marketing The Kong. Hong in US$22 listing raised through had billion Jiangsu from enterprises 24 year, this January of end the By enterprises. Jiangsu for platform capital-raising tant impor of an is Kong half Hong Jiangsu. first in held was the At campaign the 2009, Guangdong. and Liaoning Sichuan, Jiangsu, Fujian, Shandong, Zhejiang, provinces, mainland key seven in out carried being is campaign promotional Go!” Get-Set, YourMarks, Wong stressed, “We believe that Hong Kong owns a wealth wealth a owns Kong Hong that believe “We stressed, Wong with campaign three-year the of stage final the is “Go!” III. key in workshops focused smaller, of series a is “Get-Set” II. at aimed activities promotional covers Marks” Your “On I. phases: distinct three includes campaign The - C vately owned enterprises. The “On “On The enterprises. owned vately pri more attract to since aim HK which 2007, Invest by initiated paign it will be worth investing in Hong Hong in Kong,” She added. investing worth be will it that confident We Kong. Hong are in up set to enterprises Mainland more and more attracting are advantages “These them. for loans preferential the provide Hong also government Kong situation, this Considering size. small-medium are Kong Hong in invest companies mainland 70% Hong in Kong. market Morethe over occupies has Yutou Tan velopment, de years several after lower, tively rela was rent the time, that at 2003, in opened was store HK Yutou Tan instance, For out. go to enterprises mainland for opportunities great is this also ever, than important more and are — rate, support tax service low professional infrastructure, financial system, legal the — tages uncer advan Hong Kong’stainty, economic enduring In global of choice. times good a is Kong Hong Definitely, markets. emerging new Wong also mentioned the cam the mentioned also Wong ------Giant Hugs in Bad Times Zang Kejia

It is the third session of Chinese Enterprises Outbound Investment Conference, attracting both domestic and foreign government officials and entrepreneurs to walk away from the troubles the financial crisis brought, sit down and carry on discussions, however, the topic has changed unexpectedly echoing with the big environment. Different from surrounding with “how to help Chinese government walk out and be accepted by the world?” in the beginning, the foreign delegations turned to concentrate on “how to persuade Chinese enterprises to come and settle down?”. No doubt, the depressing global economy makes the western world wide-eyed re-watch “made-in-China” products and Chinese enterprise’ power and energy behind them. And this article will focus on Holland and France, two fresh members of Chinese Enterprises Outbound Investment Conference, to see what wishes they carried with them, and what they would offer for the potential Chinese cooperators, and what types of enterprises would match them to join together to stimulate the local economy.

oth Rotterdam delegation from Holland and the is not difficult to find office in Rotterdam. The cooperation will central region delegation of France come with good achieve win-win results.” preparation: both are well-organized team, within government officials, related chamber and institu- The sectors they preferred tionB members, experts from accounting firms and other related Combined with the current economic situation, Mr. Ivo service sectors. At the special seminar they respectively held in Weekenborg made a list of the industries that the city Rotterdam China, their advantages in location, pillar industries, policies, welcomed most at present. The first class are the harbor, distribu- and the environment are vividly embodied to the Chinese enter- tion, and chemical sectors, as Rotterdam itself ranks among the prises at present. top port cities of great volume and advanced technology, with Shanghai, Hong Kong, and Singapore together. And Rotterdam Bad times, good timing also plays a leading role in medical care industry with great po- According to the speech delivered by Mr. Kong Shijia, the tential, thus the medical care companies are also welcomed to chief representative of Greater China area from the France Invest- come to form great cluster. In addition, the creative industries are ment Ministry, more and more Chinese enterprises choose Europe emerging in recent years in Rotterdam and the whole country, so to invest. From 2004 to 2007, the numbers of Chinese enterprises the third preferred class of sectors are the architecture, fashion that invest in Europe increased by almost 4-5 times. At present, and design, media and gaming. Europe is China’s largest export market, and the EU is China’s The Rotterdam team especially laid great hopes on gam- largest trading partner. 21.6 percent of China’s total products ex- ing industry, the promising sector. Besides the common internet port to Europe, while only 17.6 percent to the U.S. market. games, they also mentioned the companies began to develop Kong also mentioned a new developing trend that RMB ex- game software to assist psychotherapy and driving class. Quite a change rate against the euro almost increased by 20 percentage number of Chinese companies show interests in this. points in the past one year, and the appreciation trend is still go- For France, the auto, auto parts, medicine and electronic sec- ing on, which means Chinese enterprise will pay less cost to set tors offer great possibilities and opportunities to foreign compa- offices and branches in Europe in the future. nies. “You could be one of the first investors for central region of The Holland government announced an economic stimulus plan France, also you could be one of the leading enterprises in local worth of €6 billion in last November to help the country cope with the economic development.” Ms. Marie-Madeleine MIALOT, the financial crisis, which value is equal to 1 percent of Holland’s GDP. President of Central region of France, said in an opened and en- And the government would successively issue out a series of polices couraging way. to guarantee the stability of the economy’s development. Mr. Kong Shijia also said the Chinese companies that set When was asked about “ Is it perfect timing for Chinese office and branches all over France also come from different enterprises to invest in Rotterdam, and other places of Holland, regions of China: about 40 percent companies come from North since the economy is depressing still?” by China’s Foreign China, especially Beijing taking big share, 25 percent from Trade, Ivo Weekenborg, the Chairman of Rotterdam City De- Shanghai and the neighboring provinces Jiangsu and Zhejiang, velopment Bureau, said: “Sure, because the Chinese companies 25 percent from the south especially Guangdong province, and still want to cooperate and have the money, and the Chinese gov- the rest 10 percent to 15 percent from inland provinces such as ernment show supportive gesture. As the house price declines, it Hubei, Henan and Hainan. Giant hug to which ones? Beautiful views, delicious food, safe environment, even a group of Chinese-speakers are surrounding you — no doubt the Europe is easy for Chinese to integrate into. Besides the soft environment, the local government of France and Holland also gave “hard” supports to welcome the newly emerging Chinese entrepreneurs. Mr. Sha Runzhou, the President of Hebei Hongye Machinery Ltd. (Hebei Hongye), has tasted the sweet in the cooperation with French. At surprisingly low price €10,003, Heibei Hongye purchased a French foundry enterprise with one century history. Both sides found a win-win solution to save the broken foundry factory, the simple parts will be produced by Chinese at lower the price, while the French part charges of the complicated parts and raises the price,

31 Special report 32 of the logistic industry which is heavily beneficial to the real es real the to beneficial heavily is which industry logistic the of success the to contributed all have transportation water advanced and network highway Efficient it. through runs River, Rhine the Germany, in river longest the as transportation water convenient very possessed has Duesseldorf Also, Germany. in airport tional interna largest third the from drive minutes’ 50 only is city The cal position and transportation advantage of the Duesseldorf city. budgetary favorable policy. a pursued has government the for spending, government its finance to debt foreign on Ger rely in not does city that only many the is It burden. interest afford to have not does Germany, in cost. cut to properties help enterprises of greatly can which tax and price low the to contributed Germany. in second the ranks still revenues tax income rate, tax lower a with Even revenues. tax income pecially aspects. three lowing degree. largest the to influence adverse its off dusted has has city crisis Duesseldorf the economy, worldfinancial crippled nearly international the Though system. financial makes that advantage robust and sound its is investments for place ideal an important Duesseldorf Another manufacturing. and fashion exposition, trade, companies international 400 to related than Duesseldorf more head in are there their now, set to Up there. companies quarters multinational European of number large a attracts which region, economic Rhine-Ruhr of heartland Europe. in hub cultural and economic ideal an become now has Duesseldorf es, chang such to adapted successfully Having industries. tertiary to resources human more city, of the shifting changed structure industrial the radically which Duesseldorf, in rapidly developed had at there industry World the steel the War of 1880s. II, After beginning the headquarters their established had companies tisement Chinese seminar. the the in to participated presence, at enterprises Dusseldorf of situation current the have co-introduced who Duesseldorf, in Center Business Chinese of director ly, Stah Boris and city Duesseldorf of governor vice Kruse, Wilfried A L medium- the are out to And ready and out walked already enterprises. has enterprises large-scale are percent 2 around only and ones, medium-sized and small are enterprises Chinese of percent forever.” missed He added. be will chance good the now,maybe hesitate to years 3 “However, take you finally”. chance best the got and study to years spent three I con puzzles, work theses With the strike. possible sign the to handle and how tract France, in how company consider: the may manage investors to other like just things many about achieved. be could abalance sides, two the combining therefore, i Zhen - geographi the emphasized also has Kruse Mr. addition, In it that so debt foreign no in running been has city the Third, has industry estate real the of development rapid Second, es years, recent in steadily growing are revenues tax First, fol the to Duesseldorf of success the attributed Kruse Mr. the in located is Duesseldorf 600,000, of population a With adver and companies steel many Kruse, Mr. to According According to the standard of Chinese government, almost 98 confused also I invest, officially I “Before said: Sha Mr. Germany, in hopes of attracting Chinese investments. investments. Chinese attracting of hopes in Germany, in inhabitants 600,000 of city a Duesseldorf government, by municipal Investment sponsored was Outbound seminar a Conference, Enterprises Chinese 3rd the t Duesseldorf: An Attractive Cityfor Investments inGermany ------to European market. market. European to products high-quality provide to and continuing for predicted ready is be Huawei can Duesseldorf and Huawei coop forbetween potentials eration in great future, participating the In and activities. philanthropic construction city supporting of means by responsibilities social its fulfilled actively has Huawei meantime, the In to Duesseldorf. and Huawei proved both for It outcome people. reciprocal a be local for cre opportunities job also of has millions Germany ated in Huawei large of success acquiring the value, While market million. in US$373 Huawei of reached has revenue sales Germany 2008, In Germany. in equipments unyielding oftelecom years’ supplier competitive a 8 become has Huawei work, hard Through Duesseldorf. in headquarter pean Euro its set eventually and Center Creative a established which China, in enterprise high-tech companies. private a Huawei, is Chinese example One some by rewarded amply been have ment Germany. in situation real the under better investors Chinese help to information government providing for responsible was ter Cen Business Chinese the Thirdly, accountants. and consultants tax lawyers, including large organized a effectively was network Secondly, service services. consulting detailed providing while plan business their about companies Chinese with conducted was communication active Firstly, answer. the gave Stahly Mr. tors? investors Finally, legislation. and of tax terms in policies enjoy preferential can Duesseldorf. in effective administrative very is Third, logistics. governance and transportation as such ture of its unique position.because owned. Second,importance the city owns excellentstrategic of place Duesseldorf infrastruc is Duesseldorf what all, of that’s First and about, concerned mainly companies Chinese what are technology and brand market, tion, posi that argued Stahly Mr. destination, investment their as city in. money their pour to companies for Chinese possible it make and city Duesseldorf the and bridge investors a build Chinese was between Center said Business He city. Chinese the the of in aim the investing that to some relating on questions focused detail mainly more was Duesseldorf, in Center Business Dusseldorf. in invested companies Chinese to services convenient providing been has establishment, its since center, The totally responsible is for helping Center Chinese companies to solveBusiness their problems. Chinese compa The city. the Chinese entered 50 have more nies 2008, In 2004. since Duesseldorf in es industry. tate China. It is still a long way to go for the small-sized enterprises ready. get and enterprises strong grow to small-sized the for go to way long a to come still is to It want suits China. that worldalso western which of enterprises economy, small the for depressing present in cooperators foreign the find to them for easy not is it technology, and capital, experiences, of short generally are ones small the As optimistic. so not is answer The companies”. “tiny called exactly be should there. smoothly business their on carry and headquarter, European their as Paris chosen have companies other and Lenovo ZTE, Huawei, big such as companies, Chinese enterprises. large-scale and sized The efforts made by the Duesseldorf city to pull in invest in pull to city Duesseldorf the by made efforts The What the Duesseldorf city has done to attract Chinese inves Duesseldorf the choose investors Chinese why Explaining Chinese the of director Stahly, Boris by made speech The business their start to begun have companies Chinese fact, In But what about the small enterprises? Some of them even even them of Some enterprises? small the about what But C C ------

CITY

uzhou is located in the center of the Yangtze Delta, in the south of Jiangsu Province, with Shanghai to the east, Zhejiang Province to the south, Wuxi City to the west and the Yangtze River to the north. Since 42% area of the city is covered by water, including a vast numberS of ponds and streams, Suzhou is praised as the “Oriental Venice”. Taihu Lake, four fifths of which is in the territory of Suzhou, is one of the four largest fresh lakes in China, with East Hill, West Hill and other scenic spots in its vicinity. The city is cut by the Beijing-Hangzhou Grand Canal from north to south. Together with its mild climate, making it an available destination all year round, fertile landscape and abundance of produce, it is no wonder that Suzhou is called “paradise on earth”.

SUZHOU PARADISE ON EARTH

History and culture Suzhou, the cradle of Wu Culture, is a city with a history of more than 2,500 years, tracing back to the later Shang Dynasty. The unique characteristics of the past are still retained in present-day Suzhou. The double-chessboard layout of Suzhou, with “the streets and rivers go side by side while the water and land routes run in parallel”, are preserved basically intact. Strolling the streets, you can feel the unique lingering charm of this landscape left by its long history. Suzhou is the birthplace of the flourishing Wu Culture which has had immense influence in the regions embracing Taihu Lake, west of Shanghai, southeast of Nanjing, northwest of Zhejiang and south of Yangzhou and Huaiyin. As one vital part of the Chinese traditional civilization, the Wu Culture has a long history which may be traced back to 10,000 years ago. However, just about 2,000 years ago, this culture had a surge of development. At first, the Wu Culture mainly adopted the essence of the central Chinese civilization. Until the middle of the Ming Dynasty (1368~1644), more and more overseas civilizations were absorbed by the Wu Culture, and then introduced into central China. Coming after the Qing Dynasty

34 (1644~1911), Suzhou City was one of the opera is accompanied by various kinds of most prosperous Chinese cities, both in instruments, such as flute, Sheng, Xiao agricultural production and domestic and (pipe), Sanxian (trichord) and lute. foreign trade. Therefore, it is no wonder Pintan is an ancient performing that Suzhou is one of the cities where art of storytelling and ballad singing in the earliest bud of capitalism in China Suzhou dialect, being the general name appeared. for Pinghua and Tanci. Pinghua, also Being the cradle of Wu Culture, called Dashu, is performed by a single Suzhou plays a vital role in Chinese narrator with a gavel and a fan, relating cultural history. Many great names and a historical romance, court case, martial schools of art arose here. For example, the arts story or heroic epic. The Tanci, which Wumen Fine Arts School is the finest in is also called Xiaoshu, is mainly put on by the history of Suzhou, represented by Shen two people, regarding the stories of daily Zhou, Wen Zhengming, Tang Yin and life and love. This art originally appeared Qiu Ying, whose poems, calligraphy and in the Qing Dynasty and was favored paintings are considered to be historical by successive monarchs and locals. The artifacts. Pingtan, Kun Opera and Suzhou well-known stories are Love of Weal and Opera are praised as ‘three flowers’ in the Woe, Yang Naiwu and Xiao Baicai, Meng cultural history of Suzhou. Furthermore, Lijun, Qin Xiangliang, WuSong and Lin embroidery, fans and brocade produced Chong. in Suzhou are noted world wide. If you want to explore more on their history visit the museum of Suzhou folk-costume for a complete description. The historic Wu Culture has left Suzhou City with a series of attractive heritages, including the classical gardens and water townships, the melodic rhythm of Kun Opera and Ping Tan (Suzhou ballad), the Suzhou handcrafts and the Jiangsu Cuisine. Each of them can reflect Pingtan the locals’ essential character-exquisite, mild and smart. ★Suzhou Museum ★Kun Opera and Ping Tan The Suzhou Museum is a museum of ancient Chinese art, ancient Chinese paintings, calligraphies, and hand-made crafts, situated in Suzhou. The current building of Suzhou Museum was designed by Chinese- American architect Ieoh Ming Pei. The museum has a display area of 2,200 square meters. It has more than 15,000 pieces in its collections. Most are ancient paintings and calligraphy, ceramics, Peony Pavilion, the great works of Kun Opera crafts, unearthed relics and revolution relics. Among them 247 pieces are ranked Kun Opera (Kunqu or Kunqiang) first-class. It also possesses more than is the mother of all Chinese operas, 70,000 books and documents, and over The beauty is easily captured even which has a history of over 600 years. It 20,000 rubbings of stone inscriptions. The in a common corner. originated in the Kunshan area of Suzhou collection of paintings and calligraphy City in the late Yuan Dynasty (1271~1368) includes works of masters from Song and developed to be a musical system Dynasty to Ming and Qing Dynasties. in the Ming Dynasty, and came into its golden age in the period of the Emperor Gardens, the soul of Suhzou Qianlong of the Qing Dynasty. In 2001, As the saying goes – “Gardens to the the UNESCO awarded it as the Human south of Yangtze River are the best in the Beings’ Verbal and Intangible Cultural world, and Suzhou gardens are the best Heritage Representative Work. Kun Opera sounds graceful and haunting and is good at controlling the voice and rhythm as well as every word and sentence. These performance The classic skills are vividly displayed in the style of Suzhou ‘shuimoqiang’(floating water mill tune) garden window. which embodies the distinctive character Taihu Lake of the Kun Opera. When performed, the

35 CITY

among them”. At present more than 60 gardens while a babbling stream mirrors singing are kept intact in Suzhou, and a series birds on a stone bridge. When a pavement of them have been listed in the World winds along mountain ridges, visitors will Heritage List, including the Humble see a different view. Administrator’s Garden, the Lingering Classical gardens of Suzhou are the Garden, the Garden of Master of Nets. cultural and the artistic essence of folk Most of the gardens were built architecture in China. This can only be for private use by aristocrats and rich appreciated by visiting them, and thus to businessmen and date back to the sixth understand why Suzhou is called “Paradise Century BC. Garden design went through on Earth”. an active period during the Ming Dynasty Water township (1368~1644). By the time of the latter Rating alongside these classical years of the Qing Dynasty (1644~1911), gardens are the exquisite water townships a large number of classical gardens in Suzhou. Zhouzhuang, Mudu, Tongli were spread across Suzhou as well as its Town and so on should not be missed suburbs. by any visitor. In any water township In general, the gardens are comprised of Suzhou, a number of Ming and Qing of two parts - a residential section and dynasty preserved buildings can be found. a garden. In order to replicate a natural The natural sights and human landscape environment on a miniature scale but to enhance each other’s beauty, which is a be full of life, pavilions, ponds, bridges, great attraction to people to linger there. Although filled with travellers, you can rockeries, stones and fragrant flowers ★Zhouzhuang still sense the quietness of Zhouzhuang are added to the gardens. The artistic Zhouzhuang, one of the most famous at some special moment. layout is combined perfectly with Chinese water townships in China, situated in philosophy and ideology to exhibit an Kunshan City which is only 30 kilometers architectural culture of the Orient. In a (18 miles) southeast of Suzhou. It is noted small plot each component is designed for its profound cultural background, the delicately and arranged orderly by the well preserved ancient residential houses, accomplished gardeners to show their the elegant watery views and the strong creativity. Lyric pictures and poems are local colored traditions and customs. reflected in the themes of the gardens In an area of half a square kilometer to evoke mountains and natural springs (124 acres), 60 percent of the Zhouzhuang’s requiring the visitor only to observe the structures were built during the Ming and seasonal change of plants and water. Qing Dynasties, which is from 1368 to Strolling in the garden, visitors 1911. experience an elegant cultural aura which In 1984, 38 canvases of the notable has almost disappeared from modern painter, Chen Yifei, were exhibited in a The hole in the wall is the “ancient air life. Steles and parallel couplets of halls New York gallery of Armand Hammer, conditioner” in the kitchen. or names of rooms sometimes show the chairman of Occidental Petroleum masters’ aspirations, interests, and ideals Corporation. “Memory of Hometown” or followings of Buddhist, Taoist and which depicts Twin Bridges was one of Confucian thoughts or philosophy. Using the items on display and has gained the unique skills combining architecture with world’s attention for Zhouzhuang. The the surrounding scenery, artisans created painting was chosen to be the first-day gardens that are tranquil havens away cover of the United Nations’ postage from the world’s turmoil. stamp in 1985. Very often tourists think they have Hanshan Temple (Cold Mountain reached the last building of a garden, only Temple) to discover another harmonious landscape Hanshan Temple is well-known to when they pass through the room and Chinese due to a famous poem A Night along a zigzag corridor. Each door and Mooring near Maple Bridge written by Lingering Garden is famous for its window of the rooms is decorated with Zhang Ji, a poet of the Tang Dynasty. In hundreds of inscribed tablets. carvings. Looking through the incised this poem, Zhang described the midnight window of a garden, a lush green bell rings of the Hanshan Temple (Cold waterscape unfolds itself before your eyes Mountain Temple). Since then, the temple

The petals are scattered in the grass.

36 The pious people tied their wishes to the tree in Hanshan Temple.

has become famous especially for its bell temple, hence its name. rings and Buddhism culture. Building originally commenced Hanshan Temple is situated five during the Liang Dynasty (502~557), kilometers (about three miles) from and was repaired again in the following Fengqiao Old Town in Suzhou. It is said dynasties. Now, covering an area of about that in the Tang Dynasty, a famous monk 10,600 square meters (about three acres), Han Shan came to take charge of the it presents the architectural style of the Qing Dynasty (1644~1911). It includes the Grand Prayer Hall, Sutra-Collection Building, Bell Tower, Fengjiang Pavilion and Tablets Corridor, etc. In 1995, a five- storey Buddhism pagoda as high as 42 meters (about 138 feet) was erected called Puming Pagoda, which then became the symbolic building of the temple. There are many more historical relics in the temple, such as the statue of Han Shan, the stone tablet inscription of the poem A Night Mooring near Maple Bridge and some other tablet inscriptions written by famous intellectuals of ancient China. Every year on New Year’s Eve in China’s lunar calendar, the bell is tolled to pray for the happiness and safety of the coming New Year. This festival attracts thousands of tourists both at home and abroad. Sound conditions for visiting As one of the famous tourist cities in China, Suzhou has made a great improvement to its basic facilities and tourist functions. Suzhou is accessible by plane, train and bus. Star-rated hotels with good services and reasonable guesthouses and hostels provide a range of lodging. Of

course, tasting local delicacies should not be forgotten in your journey. Authentic Suzhou cuisines and snacks can be found in Guan Qian Street, where delicious food and friendly service are memorable. When night falls, Suzhou City is quiet The famous poem A Night Mooring near and peaceful. You can enjoy it while Maple Bridge written by Zhang Ji sipping a cup of tea in any teahouse.C

37 NVESTMENT IINFO nvestment I Projects in Western CHINA Agriculture, Forestry and Husbandry Sector (Part II)

I. Project Name IV. Total Investment and Cooperation V. Anticipation of Market and Analy- Modern Agriculture Comprehensive Dem- Form sis of Investment Return onstration Base Construction Total investment of the project is 270 mil- Based on the high technology, the project II. Project Implementation Agency lion Yuan including fixed assets investment can not only speed up the agriculture in- Yan’an City Hengzheng Industry &Trade of 190 million Yuan and the fluid capital of dustrialization process in local area, but Co., Ltd. 81.4286 million Yuan. Cooperation form: also better the ecological environment. The III. Project Description cooperation, joint venture or sole invest- market prospect is broad. After the comple- In Baota district, Yan’an, it is planned to ment. tion, the annual net income is estimated to build: (i) 800 sun-light greenhouses which V. Anticipation of Market and Analy- be over 6.8 million Yuan and profit rate of can produce various counter-season veg- sis of Investment Return investment is 20.8%. The investment recov- etables of 3000 tons; (ii) agricultural and After the project is completed and reaches ery period is 5 years. sideline product processing line which can its normal production period, it can real- Contact Person: Xu Xili produce various agricultural product of ize profit of 42.9014 million Yuan and the Telephone: 029-85899888 120,000 tons; (iii) aquatic breeding base investment profit rate is 15.80%. The static Address: Taiyi Street Office, Chang’an which can produce aquatic product of 2000 investment recovery period is 6.32 years District, Xi’an City tons; (iv) vegetable exchanging market with (excluding construction area). annual exchanging volume of 100,000 tons Contact Person: Fan Bing I. Project Name and (v) fishing and recreation area. Telephone: 029-87036989 Modern Livestock Industry Development IV. Total Investment and Cooperation Form Fax: 029-87030061 Project Total investment of the project is 669.6792 E-mail: [email protected] II. Project Implementation Agency million Yuan and cooperation form is sole Shaanxi Provincial Zhongbei Industry investment. I. Project Name Group V. Anticipation of Market and Analy- The Second Stage Project of Jiayi Modern III. Project Description sis of Investment Return High-tech Ecological Agricultural Base Jingbian County enjoys special geographi- After the completion of the project, it has II. Project Implementation Agency cal and climate conditions and rich feedstuff considerable economic and social benefit. Shaanxi Jiayi Modern High-tech Ecological resources. It can produce 2.2 million tons of Regarding all construction contents, 82.8 Agriculture Co., Ltd. grass. The sheep in hand in the whole coun- million Yuan income will be realized. III. Project Description ty is over 1.1 million. It is planned to build Contact Person: Li Chunping The base is located in Chang’District, a development project integrating in sheep Telephone: 0911-8201789 13809115306 Xi’an. It has warm temperature, suitable for slaughtering, sales, leather processing, bow- the growth of forest, fruit and agricultural el of sheep processing. It can develop the I. Project Name products. The first stage has completed rich sheep resources in Jingbian County and Construction Project of Vegetable Produc- high-tech ecological agriculture base of Surrounding area. It can slaughter and deep tion Demonstration Base with Standardized 300 mu integrating in seedling area, special process 2 million sheep per year and the Facilities agriculture breeding zone, modern agricul- slaughtering can processing capacity will II. Project Implementation Agency ture planting area and rare tree protect area, reach 6 million sheep. It focuses on the pro- Construction and Management Center of tourism and sightseeing agriculture, recre- cessing of sheep leather, clothes packaging, Yangling Modern Agricultural Demonstra- ation and entertainment. The second stage blood albumen, blood globulin powder, hy- tion Park is directly under Administrative is planned to: (i) greenhouse planting area aluronic acid, cholic acid and cytochrome. Committee of Yangling Agricultural High- of 50 mu; (ii) modern high-tech cash crop IV. Total Investment and Cooperation Tech Industries Demonstration Zone, planting area with a covered area of 300m; Form which is responsible for using 83000 mu of (iii) pollution-free vegetable demonstration Total investment of the project is 500 mil- agricultural-use land to build the top rank- zone with high-efficient facilities, covering lion Yuan (including the investment of ing modern agriculture demonstration zone. an area of 150 mu; (iv) modern high-tech 95.25 million Yuan in first stage project). III. Project Description breeding demonstration area of 150 mu and Cooperation form: joint venture or coopera- The project is planned to build 10,000 mu (v). Exhibition hall and agricultural technol- tion. of vegetable production demonstration base ogy spread center of wild animal, plant and V. Anticipation of Market and Analy- with standardized facilities in Yangling famous herbal medicines, covering area of sis of Investment Return Demonstration Zone including greenhouse 50 mu. After the completion of the first stage proj- of 5000 mu, shed vegetables of 5000mu IV. Total Investment and Cooperation ect, it can realize sales income of 1078.68 mainly for production of strawberry, toma- Form million Yuan, sales tax and additive of to, pimiento, cucumber, melon and water- The total investment of the project is 220 30.57 million Yuan. The investment recov- melon. It will realize standardized planting, million Yuan. Cooperation form: joint ven- ery period is 3.8 years. fertilization, irrigation, field management ture, cooperation or stock system manage- Contact Person: Wang Zhidong, Bai and gathering etc. ment. Guangming

38 Telephone: 0912-4643103 0912-4643102 the project is planned to build live pig (ii) semi finished products and finished Address: Jingbian County Investment breeding and demonstration base with warehouse of 2000 m2 (iii) 1000 m2 of cold Promotion Bureau a covered area of 300 mu. It includes store. (iv) Office area of 1000 m2 Postal Code: 718500 85642m2 of pigsty and supported pro- IV. Total Investment and Cooperation duction area, production auxiliary area, Form I. Project Name management and residential area. It will Total investment of the project is 90 million Ecological Agricultural Industry Belt Con- introduce fine boar for breeding. After the Yuan. Cooperation form: joint venture or Projects in Western CHINA struction Project completion of the project, it can produce sole investment. II. Project Implementation Agency 90000 slaughter pigs. V. Anticipation of Market and Analy- Administrative Committee of Lintong Dis- IV. Total Investment and Cooperation sis of Investment Return trict Weihe River Ecological Area, Xi’an Form After the completion of the project, the City is a functional organization for Weihe The planned total investment of the annual profit is 28 million Yuan and ecology development under District Com- project is 94.629 million Yuan including the investment recovery period is 4 mittee and District Government. It is re- fixed assets investment of 69.402 mil- years. sponsible for the construction, management lion. Cooperation form: joint venture Contact Person: Yang Binli of various infrastructure projects and self- only. Telephone: 37663768 built projects. V. Anticipation of Market and Analy- Address: Yongshou County Seat of III. Project Description sis of Investment Return Shaanxi Province The project is planned to build an ecologi- After estimation, the sales income in nor- cal agricultural industry belt in south of mal year is 144 million Yuan and annual net I. Project Name Xingbei Weihe Bridge Its scenic area is 150 profit is 29 million Yuan. Milk Cow Breeding Base Construction mu including plant permanent ornamental, Contact Person: Chen Yongqi Project evergreen bush, flowers, serf and it forms a Telephone: 029-87036659 II. Project Implementation Agency green corridor; its cash planting area is 350 Fax: 029-87036662 Lintong District Bureau of Agriculture and mu and mainly plants walnut, grape, win- Forestry, Xi’an ter date and it also can be used for special I. Project Name III. Project Description breeding. The water surface area is 300 mu Grass Base Construction and Its Deep Pro- Lintong District has formed a development (0.3 X 0.6 km) and it can be used for water cessing Project pattern that take Yinqian Dairy as the piv- recreation project II. Project Implementation Agency ot, industry chain of “Enterprise + Base+ IV. Total Investment and Cooperation Yichuan County Animal Husbandry Bu- Farmer” as the foundation, radiating the Form reau whole district. The project is planned to Total investment of the project is 83.025 III. Project Description build cow breeding demonstration base in million Yuan. Cooperation or develop- The project is planned to meliorate 100,000 12 towns or township including Xiangq- ment with sole investment is acceptable. mu of natural grassland of the whole county iao, Youhuai, Jiaokou, Xinshi, Xuyang, V. Anticipation of Market and Analy- and newly build high-quality artificial Liyang, Yujin, Renliu, Beitian, Xinfeng, sis of Investment Return meadow of 300,000 mu, meanwhile it is Xiquan, Daiwang etc. It is planned to build Under the normal operation, the invest- planned to build the grass deep process- 100 milk cow areas with 100 milk cows ment will begin to return from the second ing plant which can produce high quality each, 100 milk cow farm with over 100 year. The total return rate is over 200%. grass of 50,000 tons including 10,000 tons milk cows each, 10 milk cow farms with The return period of scenery forestry and of grass block, 30,000 tons of grass powder over 500 milk cows each and 3 milk cow cash economic planting, breeding and water and 10000 tons of grass bundle. farms with over 1000 milk cows each, 50 receiving system will reach over 70 years. IV. Total Investment and Cooperation professional villages of milk cow breed- During the physical operation, for the third Form ing in Lintong district, Xi’an City. Up to industry that serves for the agriculture, it Total investment of the project is 80 million 2012, there will be 100,000 milk cows in can apply for tax decrease. Yuan. Cooperation form: sole investment, hand and total output of fresh milk will be Contact Person: Li Xin cooperation or joint venture. 450,000 tons. Telephone: 029-83823330 13720499814 V. Anticipation of Market and Analy- IV. Total Investment and Cooperation Fax: 029-83823330 sis of Investment Return Form Address: No. 20, Renmin Road (W), Lin- After the completion, the annula sales in- Total investment of the project is 1 billion tong District come is 20 million Yuan, pure income is 9.2 Yuan. 620 million Yuan investment has Postal Code: 710600 million Yuan. The profit rate of investment been completed. Cooperation form: sole E-mail: [email protected] is 46%. investment, Joint venture, cooperation and Contact Person: Zhang Wenjun leasing. I. Project Name Telephone: 0911-4623892 13991776258 V. Anticipation of Market and Analy- Live Pig Breeding and Demonstration Base sis of Investment Return Construction Project I. Project Name The project implementation will give play to II. Project Implementation Agency Pagodatree Flower Series Beverage Devel- local resource advantageous, promote scale Yangling Modern Agriculture Development opment Project breeding and speed the process of industri- Co., Ltd, founded in Feb, 1998 is a state- II. Project Implementation Agency alization of livestock, gradually strengthen owned sole-founded enterprise directly under Yongshou County Investment Promotion the market competitiveness of dairy market, the administrative committee of Yangling Bureau make the local dairy product famous. Agricultural High-Tech Industries Demon- III. Project Description Contact Person: Li Meijuan stration Zone. It has a registered capital of 50 Using 40,000 mu of acacia resources, it Telephone: 029-83812997 13759963158 million Yuan and total assets of 110 million is planned to build a acacia beverage and Fax: 029-83812997 Yuan and net assets of 90 million Yuan. acacia honey production line with annual Address: Lintong District Agriculture and III. Project Description production of acacia beverage and honey Forestry Bureau, Xi’an City Based on breeding technology of North- of 50,000 tons. The main construction con- Postal Code: 710600 west Agriculture & Forestry University, tents are: (i) 2000 m2 of seeling workshop E-mail: [email protected]

39 olicy zational structure in modern enterprise

P system. The narrowed meaning of cor-

esearch porate governance refers to the relations

r between internal share-holders, directors, supervisors and managers, and the How to Deal with the Profits widened meaning also include the rela- tion with interested persons, including employees, customers, depositors and the public. According to the Principles of state-Owned Companies? of Corporate Governance Structure formally adopted by the commission of Organization of Economic Cooperation and Development (OECD, an organization composed of 29 developed coun- Xiang Kaibiao, Su Danping tries), corporate governance structure should ensure that all the shareholder enjoy the fair treatment and benefits, and if shareholders’ rights and interests are ecently, how to deal with the On 1st Oct 1984, step two of the tax damaged, they should have chances to be profits of state-owned com- reform plan came into force, which di- compensated, and confirm the interested panies has become the hottest vided the revenue the enterprises turned persons’ legal rights. topic appearing almost all kinds over into 11 taxes, letting the companies State-owned enterprise is a kind ofR media. In 2008, Industrial and Com- turn over profits in taxes and leaving the of special companies, whose assets are mercial Bank of China (ICBC), PetroChi- after-tax profits to the companies. wholly or mostly sourced from state na and China Mobile together had a profit In 1987, contract mechanism was investments, and owned the country. In of more than RMB 300 billion. However, introduced into state enterprises, under fact, the investments are funded by the the three companies turned over profits the principle of “set the base number, tax from the taxpayers, and the govern- of RMB 20 billion plus which raised con- secure the turn-over, retain the surplus ment is authorized to manage these funds. cerns of the government, the media and and assume the loss”. However, the base State-owned enterprises are different scholars. Regarding this issue, we should number caused unfair competitions in from companies funded by organizations take rationale analysis from its develop- different regions, damaging the flexibility or individuals. From this we notice that ment history, the policies and its future. . of national financial income. In practice, the government and the taxpayers are the the thing was easy if the enterprises made true investors or shareholders of state- I. The historical development of more profits, but it would be a problem for owned enterprises. state-owned companies dealing those with a red result. According to the In this way, it is right for these with the profits statistics, from 1987 to 1991, contractors enterprises to turn over profits to the had a turn-over RMB 5.1 billion less than shareholders, the taxpayers or the whole In history, the profits of state-owned the promised, but only 37%, meaning 1.9 citizens, but the shareholders give the au- enterprises went through a few times of billion RMB was fulfilled by the contrac- thority to the government and the govern- repetition, from turning over to holding tors, leaving the remaining 3.2 billion ment manages these enterprises through and to turning over again. RMB the deficit of budget. the State-owned Assets Supervision and At the end of 1956, Chinese govern- In 1993, the State Council issued the Administration Commission. In a word, ment announced the completion of so- Decision on Implementing Revenue-shar- all the state-owned enterprises should cialism transformation, and the establishing Financial Management System, which turn over the profits to the Ministry of ment of traditional state-owned economy gave a clear answer to how to deal with Finance and they can retain a certain part in accordance with Lenin’s National the profits of state-owned enterprises. The for production expansion and improve Syndicate Model. However, at that time, part of the profit taken by the nation will employees’ welfare. But, the state-owned state-owned enterprises were just like an be turned over in tax, and the enterprises companies should gain approval from the appendage of the Party and the govern- will retain the remaining profit which is shareholders’ meeting, before they retain ment, whose basic task was to implement taxed by a uniform tax rate, meaning the profits or make further investments. It all the directions and instructions from a government will not take profit from the would in deed embody investors’ interests higher level. These enterprises are not en- enterprises in a time. Actually, this policy f the enterprises should gain approvals terprises, but the basic production unit of still works today. from the Ministry of Finance before they the society, though they had the name of In September 2007, the State Council utilize the profits. That the state-owned enterprise. These enterprises turned over issued About Piloting Budget System for enterprises turn over the profits conforms almost all of the profits, and the govern- the Management of State Capital, which the requirement of artificial governance, ment stood the loss, and the entire risks. mentioned state capital gains for the first and also is an important way to secure The State arranged for the state-owned time. So, as a share-holder, the govern- investors’ interests. enterprises the job positions, the materi- ment has rights to share the capital gains, als and the money. and it also gives legal basis for enterprises III. In what ways the state-owned Since the beginning of 1979, profit- to turn over the profits. enterprises turn over the profits? holding polices were carried out. State- owned enterprises were permitted to hold II. Why should state-owned How much or what ratio of the profit and make use of a certain share of the enterprises turn over profits? should the enterprises turn over? There profits. According to the papers issued is no conclusion. There are three ratios by the state council, the retained profits Before answering this question, we now: for resource enterprises as tobacco, were divided into funds for production should know something about artificial oil and oil chemical, electricity, com- development, for stuff’s welfare and for governance, also known as corporate munication and coal, they will turn over the bonus. governance, the most important organi- 10% of the profits to the government; for

40 iron and steel, transportation, electron, of the resources. Before they complete the ments, and enjoy a certain administrative trade, construction and other compa- reform, these enterprises should be paid treatment, but the salaries of executives nies with a common competitive abil- special attention by the government. But, are 20 plus times of the average annual ity, the ratio is 5%; and for companies in my opinion, the state-owned enter- income of the officials. This great gap in transformed from military enterprises prises should turn over no less than half incomes damages the salary system of and research institutes enterprises, they of the profits. civil servants, and causes corruption. The will not turn over profits in the first As to PetroChina, SinoPec, CNOOC, salaries for the executives in the state- three years. Judging from this, we can Baosteel Group, China Mobile, China owned companies should be limited to a know the ratios are really low, as state- Unicom and China Telecom, the seven certain level, and reasonable salary sys- owned companies in western countries companies or groups take 78% of the tem and supervision mechanism should must give out much more profits to the whole profits of the state-owned en- be set up. Meanwhile, common people, governments. For example, state-owned terprises. And, 6 of the 7companies or especially those low-income people, enterprises in France have to turn over groups are of oil and oil chemical or should benefit from the profits of state- half of the after tax profits, besides the communication industries, which are mo- owned companies, and enjoy the fruits of taxes, enterprises in Sweden, Denmark, nopolized by the government, so these six economic development. South Korea and other countries should should turn over profits at a ratio of much turn over one third or even two thirds of higher than 50%. V. The future development the after tax profit. In 2008, ICBC, PetroChina and China I V. The instinctive mechanism for As a company, the state-owned en- Mobile realized profits totaled more than executives should be adjusted terprise also pursues the maximum of 300.0 billion RMB. Where do the profits profits, and monopoly is the best way to come from? Were they from the hard work Now the executives of the state- realize maximum of profits. However, as and scientific management of the manage- owned enterprises have a huge income, state-owned enterprises are funded by the ment team? The answer was certainly no. which attracts the public’s attention citizens and the citizens are the consum- From the point of market competition, and raises a hot discussion. The assets, ers of the enterprises, here is a paradox we all know that PetroChina, SinoPec, fund, technology and even the favorable for state-owned enterprises, which are CNOOC, China Mobile, China Unicom, policies are all arranged by the govern- the enterprises “exploit” their owners. China Telecom and some other enterprises ment, and the country assumes the losses The citizens invest in the enterprises in are making huge profits through monopo- of the state-owned enterprises, so the hope of getting investment yield, but the lization of resources, as there are barriers government has rights to take over the enterprises bring products and services for other companies to enter the market. profits. The news, that board chairman of to the citizens at a high price, to pursue In western countries, to natural mo- CNOOC has an annual income of more the “high profits”, leading to the citizens nopoly industries, the governments usu- than RMB 10 million and Ma Mingzhe, exploit themselves. The reason for this is ally levy special income tax. For example, board chairman of Ping An Insurance had due to the mal-position of governmental as the oil price in 2008 was extremely a salary of RMB 66.16 million in 2007, function. high, the government can impose special stirred the public. To meet the requirements of market income tax, meaning if the oil price ex- Where has the profit of state-owned economy, the government should have ceeded a certain value, the related enter- enterprises gone? According to Wu less operational state-owned assets, but prises would be taxed. This is a general Jinglian, researcher of Development Re- more non-operational assets, as opera- move in the world, and is in accord with search Center of the State Council, there tional assets mean risks. The govern- investment yield principle. The resources are two underlying reasons for rich-poor ment should not take risks to throw belong to the citizens, and the huge in- polarization. One is the corruption and state-owned assets into the market. And come is from market monopolization not the other is monopoly. “That correct- once the government involves in the operation, so the government should take ing the corruption to achieve equality operation, the market will be stirred. So, this profit in way of tax, and distribute it of opportunity is positive correlation to the administration office of state-owned to the citizens. efficiency improvement. And the much assets should be a manager but not an Liu Chuanzhi, board chairman of higher salaries in monopoly industries are operator. Lenovo, once said, “The government not the unfairness caused by differences The number and scale of the state- should take over half of the state-owned in personal capacity.” He said. In this owned enterprises may decrease at the enterprises’ profits, to increase public way, to narrow the gap between the rich same time, but the government should consumption.” This view is correct, be- and the poor, the most important thing is concentrate the enterprises into key in- cause that the government takes over at to control the corruption and strengthen dustries and fields which are related to least half of the profits is in accord with the market competition in monopoly in- the national security and national econo- investment yield principle. In theory, dustries. my. However, these enterprises will pay state-owned enterprises have a limited The unreasonable distribution caused more attention on their social responsi- autonomy right, but they should not have lots of problems. First, it will cause bilities, not pursuing the profits, and they rights to distribute the profits (except con- discontentment. Certainly, executives may be more like a “welfare enterprises” tracted enterprises), as the citizens own contribute to the huge profits of the state- till then. the profits. owned enterprises, but is their contribu- State-owned enterprises may gradu- However, due to these enterprises tion that large, equal to their salaries? For ally disappear from the competitive in- differ from each other in current situa- example, the finance industry in China is dustries, leaving private or other types of tion and the carrying-out of sustainable a monopolized industry, and the compa- companies the main force in the fiercely- development plans, the government could nies of this industry get their profits from competing market. And if state-owned not implement a simple tax of the same the government authority, not by capabil- enterprises leave the market, they won’t rate to all state-owned enterprises. Mean- ity or competitive ability, so the profits of turn over profits any more. C while, there still a lot of state-owned these companies should be turned over, enterprises are under reform, with the not divided by the executives. Second, it (Authors: Xiang Kaibiao, senior main problem is regroup, meaning the re- cause envy from the officials. The execu- consultant of Allpku, and Su Danping group of administration system and also tives usually take positions in the govern- from Beijing Institute of Technology)

41 olicy of land as capital to guarantee

P further loans. As the scale of loans increased, the land might not be able to cover the Positive Effects loan, which could lead to the situation of not having sufficient funds to repay bank loans, thus resulting in under- FROM SHRINKING INVESTMENT estimated non-performing rate of bank loans. Third, many local gov- Luo Yang ernments’ lack of financial resources also limits the practical effect of the central investment. ince its launch in No- After the release of the RMB 4 vember 2008, the RMB trillion central investment plan 4 trillion investment in 2008, the local governments plan has been carrying rushed to announce their in- Sthe task of “capital growth”. tention of investment, and the According to the plan, from stimulating plans of all local the fourth quarter of 2008 to governments reached a total the end of 2010, the central of RMB 20 trillion. According government will increase a to past experience, the ratio total of RMB 1.18 trillion of central and local and social additional funds to promote investment is about 1:3. It is local and social investment. estimated that in those RMB 4 The goal is to achieve a total trillion programs of stimulat- investment of around RMB 4 ing the economy, the need for trillion, of which RMB 487.5 project capital is about RMB billion will be added this year. 2.4 trillion, of which RMB The first two batches of cen- 2,500 billion still lacks. In the tral government’s investment first two batches of investment, have effectively stimulated because of the lack of funds in economic growth and pro- some areas, there are still proj- moted market confidence. On cannot be relied on the central has been fully aware of this ects which have not yet started, April 15, Premier Wen Jiabao investment alone; it should problem. On the State Council or their progresses have not yet proposed in the State Council rely more on the social and executive meeting held on met the requirements. executive meeting that the cen- private investment. Judging April 15, in addition to issuing In all, the decline in the tral government should “pay from the first two batches of calls for an immediate third scale of the central investment close attention to promoting the central investment, rail- batch of central investment, ref lects a more pragmatic the construction projects car- way, highway, infrastructure special mention of encourag- tendency of macro-economic ried out by the first two batches construction projects, etc. are ing private investment has policies. The future economic of investment and immediately the major parts in the local also been made. recovery is no longer a task issue a third batch of central governments’ proposals. The Second, the slowdown in of just the central investment investment.” investment in terms of peo- the scale of the central invest- to undertake the projects, According to economic ple’s livelihood and consump- ment implied central govern- but rather to go hand in hand data of the first quarter by tion are still relatively small. ment’s alert of the risk in the with private investment; no National Bureau of Statis- As land, capital and other increase of the credit. In the longer works at the cost of tics, China’s economy shows resources are highly inclined first quarter of 2009, the new non-performing assets, but signs of recovery, though to the state-owned economy, loans in the banking industry in the control of risk on the still not solid. Therefore, the private capital can hardly en- reached RMB 4.58 trillion, basis of healthy development; central government’s policy joy this “pie” of resources, and nearly the scale of credit no longer be in disregard of is extremely concerned by all thus private investment has throughout the year 2008. the local the strength of the walks of life. On April 22, Na- not really become active. To In that RMB 4.58 trillion, economy and blind invest- tional Development and Re- a large extent, it has still been financing bills, middle and ment, but a balanced devel- form Commission announced suppressed. The phenomenon long-term loans were enjoying opment between central and the third batch of central of “the state in, the private rapid growth. Judging from local governments, between investment, with the amount out” has become worse. The the trend of the credit perspec- the economic and social devel- of which roughly RMB 70 effect of the private invest- tive, on the one hand, there opment. The more pragmatic billion, far below the scale of ment promoting economic cannot be such a supernormal macroeconomic policy also investment in the previous growth has not yet been ef- growth; on the other hand, the means that the future eco- two batches, causing many fective, and the central invest- extraordinary growth of credit nomic structure will be more speculations. In my view, the ment has constituted a certain may also be brought about reasonable, and the future reduction in the amount of the squeeze of the private invest- by excessive growth of non- economic growth will be more third central investment plan ment. Nevertheless, without performing loans. Judging stable. C precisely reflects the central the healthy growth of private from flows of the loans, the government’s more pragmatic investment, it is difficult for new loans mainly went to the (Author: from Haikou macroeconomic policies. the economy to recover. Obvi- local infrastructure, and these Branch, People’s Bank of First, economic recovery ously, the central government projects were using the benefit China)

42 esearch r

CHINA’S BANKING REFORM in Progress (Part II)

Erh-Cheng Hwa, Yang Lei 1

II.2 Operating Income in 2007 from 2006. Net interest income by taking up 87.3 % of total operating income in perating income sustained high growth into 2007 on account of rapid in- 2007 was still the largest source of bank creases in both net interest income and fee and commission income. For the income. four listed state commercial banks, operating income reached RMB 716.6 billion in 2007, an increase of 37.7% over 2006 (Table 2). Net interest income Significant increase in net interest reachedO RMB 623.7 billion, an increase of 34.1% over 2006, on account both higher income loan growth and greater interest margin, 2.77% in 2007 up by 0.01 percentage points The growth in net interest income was due to several factors. The first is, Table 2 as discussed above, more rapid increase in bank deposits and the containment of Operating Income of Four State Commercial Banks (Unit: 100 millions) funding costs while lending rates were raised by the central bank. Second, the effective lending rate was also raised by Bank Name 2006 2007 Growth Rate (%) the lengthening in the average loan matu- ICBC 1807.05 2541.57 40.7 rity as a result of a rapid increase in high- yielding long-term investment, as well as BOC 1460.74 1806.69 23.7 greater bargaining power on the part of banks, as the overall credit condition was CCB 1502.12 2194.59 46.1 tightened. The one factor that worked to BOCOM 434.59 623.22 43.4 reduce net interest income was the decline in the loan/deposit ratio: Growth in net interest income = Data Source: Bank Annual Reports growth in bank deposits + growth in [average lending interest rate * (loan/deposit) 1 – average deposit interest rate] Erh-Cheng Hwa, Chief Economist, China Construction Bank ; Yang Lei is affiliated with China Center for Economic Research, Beijing University. The findings, interpretations, and conclusions of Explosive growth in fee and com- the paper are entirely those of the authors. They do not represent the views of the organizations with mission income which the authors are affiliated. However, it was non-interest income

44 that witnessed an explosive growth. For 13 the four state commercial banks, fee and Provisions for impairment losses vary according to individual banks. In the case of CCB, commission income grew by 112.4% in it amounted to RMB 275.9 billion in 2007, about 21.5% of net profit.

2007 to reach RMB 100.7 billion. As 14 result, the share of fee and commission The marginal tax rate was 33% in 2007 but reduced to 25% in 2008. income in total operating income rose sharply to 14.0% in 2007, up by nearly in “settlement and five percentage points from 2006. clearing fees” ben- The fastest growing component of efited from rapid fee and commission income was “fees economic growth for agency services”, which grew by 3.8 and foreign trade, times in 2007 over 2006 and reached the deepening in RMB 50 billion or 45.5% of the total, up financial markets, as from 24.5% in 2006. CCB had the high- well as the deploy- est proportion, 50.2%, among the four ment of efficient IT largest listed state commercial banks. technology and sys- Strong sales in stock mutual funds and tems. Finally, banks insurance products accounted for the also stepped efforts strong performance. The former was in provide a grow- directly resulted from the booming stock ing variety of wealth market while the latter benefited from management prod- the strong growth in the insurance mar- ucts to their clients ket overall. The second largest compo- including fixed in- nent of fee and commission income was come, entrusted and “bank card fees”, which grew by 39.6% structural products, in 2007 over a year ago and rose to RMB and QDII (qualified 15.6 billion and constituted 14.1% of domestic institutional investors). As a from 2006. the total, but representing a decline of result, national sales of wealth manage- In spite of rapid increases in operat- 6.5 percentage points from 2006. The ment products reached more than RMB ing income, the four state commercial wider insurance and usage of bank cards 1,000 billion in 2007, up from RMB 200 banks were able to control cost increases raised the proportion of total retail sales billion in 2005 and RMB 400 billion in to below the growth in operating income. charged by credit cards to 21.9% in 2007, 2006, with an average annual growth As a result, the cost/income ratio fell 4.9 percentage points greater than 2006. rate exceeding 100% over the last three- again in 2007, by 1.62 percentage points “Commission on trust and fiduciary year period. to 37.8% from 39.4% in 2006. As a re- business” also grew briskly in 2007; The strong increase in fee and com- sult, profits before tax (and before provi- ICBC, CCB, and BOCOM, respectively, mission income was due more to the sions for impairment losses) surged to by 202.7%, 156.0%, and 269.9%. The growth in personal fee and commission RMB 413.6 billion, an increase of 42.5% major businesses in this category were income than corporate fee and commis- over 2006, the highest on record in recent related to securities investment/mutual sion income. For instance, for ICBC, per- years13. Net profit (after tax)14 reached funds and enterprise annuity. As finan- sonal fee and commission income grew RMB 233.8 billion, an increase of 49.5% cial assets continue to grow, trust and 146.6% in 2007 with its share in total fee in 2007. Earning per share generally ex- fiduciary business holds a great potential and commission income having risen to ceeded 20 cents per share for most banks, to become a significant source of revenue 68.0% in 2007, up by 10 percentage points for an increase of at least 20.0%: ICBC, in the future. The other major categories from 2006. Similarly, for CCB, personal 0.24 cents (41.2%); BOC, 0.22 cents of fee and commission income are “set- fee and commission income grew 183.3% (22.2%); CCB, 0.3 cents (42.9%); BO- tlement and clearing fees”, “consultancy in 2007 over 2006, with its share in total COM, 0.43 cents (59.3%). and advisory fees” and “guarantee and fee and commission income having risen In 2007, retail banking profit rose credit commitment fees”. The increase to 64.5%, up by 12 percentage points sharply for ICBC, CCB, respectively,

Table 3 Shares of Corporate and Retail Banking Revenue in Total Revenue (%)

Corporate Banking Retail Banking Investment Bank Name

2006 2007 Change 2006 2007 Change 2006 2007 Change

ICBC 50.6 49.2 -1.4 34.47 33.9 -0.5 14.9 16.9 2.0

BOC 49.6 54.3 4.7 33.61 35.3 1.7 16.8 10.3 -6.5

CCB 56.4 54.3 -2.2 28.77 34.1 5.3 14.8 11.7 -3.2

BOCOM 60.0 60.3 0.2 11.55 13.6 2.1 28.4 26.1 -2.3

Data Source: Bank Annual Reports

45 by 159% and 145%, but more modestly for BOC, 27%, and accounted for more than a from the average of 112.4% for the four quarter of total profit for the four state commercial banks. banks in 2007: CCB, 22.8%, ICBC,

esearch Helped by higher profit margins and capital efficiency, the return on equity ROE 14.7%, BOC, 12.4%, BOCOM, 24.6%. 15

r improved significantly for the banks . The return on assets ROA of all the four state This latter was also due to a sharply commercial banks rose to above unity in 2007 after a year of strong growth: ICBC, cooled stock market that has curtailed 1.01 (42.3%); BOC, 1.09 (14.7%); CCB, 1.15 (25.0%); and BOCOM, 1.07(33.8%). CCB income derived from hot-selling market- registered the largest growth in ROE among the four banks: 30.0% in 2007, followed by based financial products of the previous 19.2% of BOCOM, 6.4% of ICBC, and 0.2% of BOC. By the end of 2007, ROEs for the year such as stock mutual funds. As a four state commercial banks were close to or above 15% with the highest level obtained result, the ratio of fee and commission by CCB: 19.5%, followed by BOCOM: 17.2%, ICBC: 16.1%, and BOC: 14.2%. income to total operating income did not further increase in 2008. Asset quality improved In 2008, profit growth was much less Both the NPL ratio and the absolute amount of NPL were reduced for the four listed than in 2007 although it was still respect- state commercial banks (Table 4). The NPL ratios at the end of 2007 were in range of able. Growth in profit before tax in 2008 2.0% - 3.0%: 2.74% for ICBC; 3.1% for BOC; 2.6% for CCB and 2.1% for BOCOM far be- was, respectively, 18.7% for CCB, 26.0% low the average of 6.2% of all the banks. The coverage ratio for loan loss provisions were for ICBC, -3.9% for BOC, and 14.8% for above or near 100%: ICBC, 103.5%; BOC, 108.2%; CCB, 104.4%; and BOCOM, 95.6%. BOCOM, compared with an average of 43% for the four banks in 2007. Growth Table 4 in profit after tax in 2008 also fell, but it was higher than that of profit before tax: Nonperforming Loan (NPL) and Provisioning Coverage, end 2007 CCB, 34.0%, ICBC, 35.2%, BOC, 6.2%, BOCOM, 40.0%, compared with an aver- Provisioning Coverage age of 45% in 2007. NPL (100 million) NPL Ratio (%) Ratio (%) In 2008, ROAs for the banks were Bank Name Compared Compared also all higher than attained in 2007 with Compared with 2007 2007 with the last 2007 with the last CCB similarly leading the group: CCB, the last year year year 1.3%, ICBC, 1.2, BOC, 1.02%, BOCOM, 1.19%. Similarly, ROEs for the banks were ICBC 1117.74 -259.71 2.7 -1.1 103.5 32.9 all higher than attained in 2007 with again BOC 888.02 -94.18 3.1 -0.9 108.2 12.2 CCB leading the group: CCB, 20.7%, ICBC, 19.4, BOC, 14.6%, BOCOM, 20.1%. CCB 851.70 -92.29 2.6 -0.7 104.4 22.2 These financial indicators compare favor- ably with global bank giants. BOCOM 226.94 -7.83 2.1 -0.5 95.6 23.2 Asset quality further improved Both the NPL ratio and the absolute Note: Data for BOCOM are impaired loan, impaired loan ratio and impaired amount of NPL were reduced for the provisioning coverage ratio. four listed state commercial banks (Table 4). The NPL ratios at the end of 2007 Data Source: China Banking Regulatory Commission were in range of 2.0% ~ 3.0%: 2.74% for ICBC; 3.1% for BOC; 2.6% for CCB and III.1 Asset-liability management in 2008 2.1% for BOCOM far below the average of 6.2% of all the banks. The coverage The macroeconomic environment changed drastically in the second of 2008 with the US financial crisis going global and starting to dampen global growth. In coping with the downturn of the economy engineered by the sharp decline in exports as well as the downward adjustment in the real estate sector, the government expeditiously changed macroeconomic policy stance from one of tightening to loosening. Thus, monetary policy had been loosened by removing the credit quotas, and lowering interest rates and reserve requirements. In addition, the government unveiled a RMB 4 trillion pubic spending program to stimulate domestic demand in early November. Domestic credit restraint for most part of the year and the global slowdown in the second half in combination had sharply slowed economic growth to 6.8% in the fourth quarter of 2008 ending 9.0% for the whole year, from a high of 13.0% in 2007. As a result, both growth in bank liability and assets slowed from around 20% in 2007 to about 15% or less in 2008. The loan to deposit ratio continued to decline into 2008.

III.2 Operating Income in 2008 However, growth in operating income began to slow in 2008 in keeping with the overall slowdown in the economy. First, growth in net interest income slowed in 2008 compared with the average of 37.7% for the four banks in 2007 owing to both slower loan growth and a narrowing in interest margin: CCB, 16.7%, ICBC, 17.1%, BOC, 6.7%, BOCOM, 22.1. Second, growth in personal fee and commission income also slowed

15 The return to equity is the product of profit margins (profit/revenue), asset turnover (revenue/ assets), and the leverage ratio (assets/net equity).

46 search supports ing reform, it is clear that banks have en- the recent em- tered a new phase of reform only a short pirical work by while ago with much of the journey still Demetriades et lying ahead. Many of recently launched al (2008) show- corporate reforms: governance, internal ing that bank control and operation procedures, risk loan is positively management, and human resources are correlated with still work in progress and have not yet growth in future been brought to fruition. Banks also are value added and also in the early phase in adapting to the total factor pro- new business model mandating more ductivity during attention being paid to retail customers 1999~2005, even and commission and fee-based incomes. for state-owned Hence, they have to continue to be valiant enterprises. on reform and learn to adapt to the vaga- Can this ries of financial markets while catering to financial perfor- the evolving needs of customers as their mance of banks demand for new financial services grow. be sustained? It While putting the bet on banking appears that the reform to improve bank performance, good financial there is no reason to be overly pessimis- performance has tic on the macroeconomic outlook and resulted from two its implied risks. China enjoys consid- crucial factors, erable flexibility to stimulate domestic which are not easy demand in the short-run to offset the to delineate from faltering external demand, which of- each another. First, fers the golden opportunity to rebalance a supportive mac- the economy toward domestic demand. roeconomic envi- First, the government budget was nearly ronment – with a in balance in 2008 (deficit of 0.4% of strong growth av- GDP) while government debt was mod- eraging 10.7% per erate (20% of GDP). Second, as ana- annum over the lyzed before, the banks are well capital- period: 2003-2007 ized and thus well positioned to support and a partially the government’s stimulus package. liberalized inter- In the meantime, the banks are better est rate regime – equipped than any time in the past to helped to boost scrutinize loan demand derived from bank revenues. the stimulus package both for their own Second, banking benefits as well as for the Chinese econ- r a t i o f o r l o a n l o s s p r o v i s i o n s w e r e a b o v e reform has raised efficiency and helped to cap omy. Furthermore, China has consider- 16 or near 100%: ICBC, 103.5%; BOC, costs, both boosted the return on capital . able pent-up or unmet demand in public 108.2%; CCB, 104.4%; and BOCOM, Compared to banking reform, the services and many other areas. Taking a 95.6%. In 2008, NPLs continued to de- supportive macroeconomic environment somewhat longer-term perspective, with cline while loan loss provisions were exerts more a cyclical than fundamental an urbanization rate at 45.0%, China has further raised under the policy guidance impact on bank performance and is thus consider room to grow perhaps still at of the China Banking Regulatory Com- a less sustainable factor. Indeed, high a rapid pace until rural surplus labor is mission. The NPL for CCB at the end growth proves to be unattainable since it fully absorbed. of 2008 was 2.1%; ICBC, 2.3%; BOC, ignited inflation and asset price bubbles in The government unveiled a public 2.7%; and BOCOM, 1.9%. The coverage the stock and real estate markets in 2007. spending stimulus package of RMB 4.0 ratio for loan loss provisions at the end Growth began to slow in 2008 under the trillion in November 2008 for 2009- of 2008 were 131.6% for CCB, 130.2% weight of macro stabilization polices even 2010, which is undertaken in conjunction for ICBC, 117.2 for BOC, and 116.8% for before the eruption of the financial cri- of an easing of money and credit policy. BOCOM. sis in latter 2008 that further dampened Indeed, the package has been supported growth. Economic slowdown threatens with a strong credit growth resulting in a Conclusion: Assessment of bank asset quality for the banks. The immedi- growth in M2 of 25.5% at end of March performance ate challenge for the banks is to skillfully 2009. If properly implemented, the stim- navigate a more difficult economic terrain ulus package should not only help China Judged by their recent strong finan- than hitherto by properly controlling risks to revive short-run strong growth, but, cial performance, the transformation of while staying on the course of restructur- more important, regain macroeconomic the large state banks has been successful ing and reform. balance over the medium-term, which so far. Furthermore, as fee and commis- If the successful public listing is an important objective of the stimulus sion income has taken off to become a marked the end of the first phase of bank- package. (The end ) C strong source of profit growth, banks ap- pear on track to realize their long-term strategic goal of diversifying into a more 16 Refer to footnote 15 in which it shows that both profit margin and efficiency of deploying assets are stable base of income generation that is factors determining the return to capital. less prone to business cycle risks. Our re-

47 airs & Expos China Fairs & Expos F

Energy and resources, Mining Tel: 86-20-87358971 sports, gourmet and wine Industry, Metallurgy, Welding, Fax: 86-20-87358977 Web: www.weacn.com Electric Power Email: [email protected] Add: Room 1508, Jiaxing Building, No.877, Dong- The 11th China (Xi’an) International Heat Supply fang Road, Pudong, Shanghai, China, 200122 and Boiler Oven Energy Saving & Discharge Tel: 86-21-51118275 Decrease Technology and Equipment Fax: 86-21-50586650 Exhibition Email: [email protected] Date: May 20-May 22, 2009 Frequency: Yearly 2009 China Northwest (Ningxia) Venue: Xi’an Qujiang International Convention & International Equipment Manufacture Fair Exhibition Center Date: May 22-May 25, 2009 Exhibits: heat supply technology and equipment, Frequency: Yearly heat supply system automation and accessories Venue: Yinchuan International Convention and equipment, new technology product promotion, etc Convention Center Add: Rm 806, Fucheng Building, No.91, Chang’an Exhibits: industrial control automation and appara- North Road, Xi’an, Shaanxi, China, 710061 tus, machine tool, mould technology and equipment, Tel: 86-29-87818002 special purpose vehicle, etc Furniture, Household Decorations, Fax: 86-29-87812358 Web: www.chinajiaodian.com Woodwork, Floor Decorations Email: [email protected] Add: No.169, Jianshe West Road, Xi’an Shaanxi, 2009 7th China (Shanghai) International China, 710054 2009 China International PTC (Chongqing) Furniture Exhibition Tel: 86-29-87805008 Exhibition Date: May 19-May 21, 2009 Fax: 86-29-87890239 Date: May 22-May 25, 2009 Venue: Shanghai New International Expo Center Email: [email protected] Frequency: Yearly Exhibits: soft furniture, integrated furniture, etc Venue: Chongqing International Convention & Exhi- Web: www.furnitureshanghai.com.cn bition Center Add: 8F, modern Communication Building, 201, Xin- Exhibits: technical hydraulic, pneumatic technol- jinqiao Road, Shandong, China, 201206 ogy, fluid power components, sealing technology, Tel: 86-21-50552222 mechanical transmission, etc Fax: 86-21-50321966 Web: www.cwmte.com.cn Email: [email protected] Add: 2805 Keer Business Building, 31 Kaifa Road, Nanping, Chongqing, China 2009 China Shanghai International Furniture Tel: 86-23-86376309 Production Equipment and Raw Materials Fax: 86-23-86308312 Exhibition Email: [email protected] Date: May 19-May 21, 2009 Venue: Shanghai New International Expo Center Exhibits: furniture etc Add: 8F, modern Communication Building, 201, Xin- 2009 Hunan Changsha Energy Saving jinqiao Road, Shandong, China, 201206 Window, Door, Glass, Curtain Wall and Tel: 86-21-50552222 Equipment Exhibition Fax: 86-21-50321966 Date: June, 2009 Email: [email protected] Frequency: Yearly Venue: Changsha Red Star International Exhibition The 2nd China (Shanghai) International Center Redwood Art Furniture Exhibition Exhibits: energy saving window, door, equipment, Date: May 19-May 21, 2009 curtain wall, plate, equipment, decorative glass and Venue: Shanghai New International Expo Center equipment, etc Web: www.furnitureshanghai.com.cn Web: www.jienengtech.com Construction, City planning, Add: 8F, modern Communication Building, 201, Xin- Add: Rm 816/817, Information Bldg, No.59 Bayi Decorations jinqiao Road, Shandong, China, 201206 Road, Changsha, Hunan, China, 410007 The 13th International Metro, Light Rail and Tel: 86-21-50552222 Fax: 86-731-4461049 Inter-City Express Railway Exhibition Fax: 86-21-50321966 Email: [email protected] Date: June, 2009 Email: [email protected] Venue: Guangzhou Jinhan Exhibition Center Machinery, Machine tools Exhibits: train carriage, communication and direc- 2009 Expat Show Beijing tion system, power supply system, environment Date: May 22- May 24, 2009 2009 The 7th Yantai International Machine protection system, power supply system and fire Frequency: Yearly Tools Expo fighting systems, facilities and materials, etc Venue: Exhibition Hall of China World Trade Center Date: May 21-May 23, 2009 Web: www.expo-cn.com Exhibits: international freight, indoor design, house- Frequency: Yearly Add: Room 23K, Mingyuege, No.20, Mingyue 1st keeping service, interpretation and transportation, Venue: Yantai International Expo Center Road, Wuyang New Town, Guangzhou, Guangdong, auto consultation, education, health, insurance, Exhibits: metal-cutting machine tools, etc China, 510600 finance and banking, legal consultation, tourism, Add: 2219, Palace of Culture building, 117, Nan

48 Street, Yantai, Shandong, China Frequency: Yearly Frequency: Yearly Web: ytjinnuo.com Venue: Xi’an Qujiang International Convention & Venue: National Agriculture Exhibition Center Tel: 86-535-6663198 Exhibition Center Exhibits: Refrigeration equipment, air conditioning Fax: 86-535-6686272 Exhibits: heat supply technology and equipment, equipment, installment materials, tools and equipment Email: [email protected] heat supply system automation and accessories for refrigeration and air conditioning equipment, equipment, new technology product promotion, etc Add: Room 1608, Qingyouyuan, Beijing, China Add: Rm 806, Fucheng Building, No.91, Chang’an Tel: 86-10-84966225 North Road, Xi’an, Shaanxi, China, 710061 Fax: 86-10-84967955 Tel: 86-29-87818002 Email: [email protected] Fax: 86-29-87812358 Email: [email protected] The 8th Suzhou International Electronic Equipment, Component and Electronic 2009 China (Dongguan) International Water Instrument Fair 2009 Treatment Exhibition Date: May 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Electro-Acoustic Products Fair & Technology control valves, etc Seminar Web: www.cwmte.com.cn Entertainment, Leisure Date: May 23-May 25, 2009 Add: 2805 Keer Business Building, 31 Kaifa Road, 2009 China (Zhengzhou) International Frequency: Yearly Nanping, Chongqing, China Swimming Pool & SPA Exhibition Venue: Suzhou World Exhibition International Expo Tel: 86-23-86376309 Date: June 3-June 5, 2009 Center Fax: 86-23-86308312 Frequency: Yearly Exhibits: electron-acoustic facilities, sound box, Email: [email protected] Venue: Zhengzhou International Exhibition Center family cinema, etc Exhibits: real estate developer, villa design institute Add: Rm 506, 44 Bldg, Dongbang Xinyuan, Huashan swimming pool engineering corporation, SPA facili- Road, Suzhou, Jiangsu, China, 215129 Mould ties, club, star hotel, hot spring resort Tel: 86-512-66326046 2009 China (Chongqing) Formwork & Tel: 86-371-60689380 Fax: 86-512-66326069 Scaffolding Engineering Exhibition Email: [email protected] Date: May 21, 2009 Hotel, Catering, Tourism Venue: Chongqing International Convention & Exhi- Qingdao International Electronic Industry bition Center The 4th (Zhengzhou) International Manufacturing Expo Exhibits: wall template systems, column-mode sys- Hospitality Equipment & Supplies Exhibition Date: June 3-June 5, 2009 tem shaft module systems, split systems, scaffolding Date: June 3-June 5, 2009 Venue: QIngdao International Convention Center systems, etc Frequency: Yearly Add: No.6, Minjiang Road, Qingdao, Shandong, Web: www.cnfair.org/jc/moban.htm Venue: Zhengzhou International Exhibition Center China, 266071 Add: 10 F4 City Light Building, 19 Jiangnan Avenue, Exhibits: kitchen ovens, Chinese and western Tel: 86-532-85807385 Nanping, Chongqing, China kitchen equipment, fast food equipment, refrigerator Fax: 86-532-85833615 Tel: 86-23-86382802 of keeping fresh, bakery equipment, etc Email: [email protected] Fax: 86-23-62925059 Add: Room 303, Unit 2, No.13 Building, CBD Ring Road, Zhengdong District, Zhengzhou, Henan, China, 450016 Transportation, Logistics, Storage Tel: 86-371-60689369 2009 The 12th China (Guangzhou) Logistics Expo Fax: 86-371-60689377 Date: May 20-May 22, 2009 Email: [email protected] Frequency: Yearly Venue: Guangzhou Jinhan Exhibition Center Exhibits: warehouse equipment and technology, logistic service, supply chain management, etc. Add: Room 403, Building 6, Tianhe Tower, Tiyu West Road, Tianhe District, Guangzhou, Guang- dong, China 510620 Tel: 86-20-38808367 Fax: 86-20-38913016 Information Technology, Network, Email: [email protected] Communication, Broadcast The 1st Northeast Asia (Shenyang) International Automobile Exhibition Environmental Protection and Date: May 22-May 25, 2009 Water Processing Frequency: Yearly Electronic Intelligence 2009 China (Xi’an) International Hot and Venue: Liaoning Industrial Exhibition Center Cold Water System, Pump, Valve, Pipe and The 2009 China International Refrigeration, Air Exhibits: automobiles, etc Fitting Technology and Equipment Exhibition Conditioning and Ventilation Technology Fair Add: 4th Floor, International Trade Building, No.35 Date: May 20-May 22, 2009 Date: May 20- May 22, 2009 Qingnian Avenue, Shenhe District, Shenyang, Lia-

49 oning, China, 110014 2009 Shanghai International Food Web: www.sy-expo.com Tel: 86-24-22729952 Procurement Exhibition Add: 22-18, Korea New Building, No.3, Changjiang- Fax: 86-24-22729980 Date: May 13-May 19, 2009 nan Road, Huanggu District, Shenyang, Liaoning, airs & Expos Email: [email protected] Frequency: Yearly China, 110014 F Venue: Shanghai Mart Exhibition Hall Tel: 86-24-62222126 Comutex Taipei 2009 Exhibits: pregnant and baby food, fast food, etc Fax: 86-24-86401105 Date: June 3-June 7, 2009 Web: www.cbichina.net Email: [email protected] Venue: Taipei World Tarde Center Add: 2-1207, Jiaye Building, 21 Shunsantiao, Nan- Exhibits: Computer hardware, computer software, sanhuan East Road, Beijing, China The Fourth China (Shanghai) International peripheral equipment, digital camera Tel: 86-10-87675297 Health Industry Expo Tel: 86-752-21951515 Fax: 86-10-87682166 Date: May 23-May 25, 2009 Email: [email protected] Email: [email protected] Frequency: Yearly Venue: Shanghai Everbright Convention and Exhibi- 2009 The 10th China International Food and tion Center Textile and Clothing Beverage Exhibition Exhibits: health food, health drinks, functional China (Guangzhou) Global Sources Date: May 19-May 21, 2009 and nutrition food, specialty oils, medicines, health International Baby and Children Goods Expo Venue: Shanghai New International Expo Center equipment, health clothing and sleeping supplies, Fate: June, 2009 Exhibits: beverages, etc daily necessities, health care service, etc Venue: Guangzhou Jinhan Exhibition Center Web: www.cgsialchina.3ge.com.cn Web: www.dongqiexpo.com.cn Exhibits: baby and children garment, toy, brain de- Add: 1002, 1, 99 Nong, Jiangan Road, Shanghai, Add: B, Floor 5 Yinlu Building, 1112 Pingliang Road, velopment products, baby caring products, etc China, 200233 Shanghai, China, 200090 Web: www.chinasourcingfair.com Tel: 86-21-29423514 Tel: 86-21-68048327 Add: Room 2318, Shimao South Road, Zhujiang Fax: 86-21-54620109 Fax: 86-21-68048326 Xincheng, Tianhe, Guangzhou, Guangdong, China, Email: [email protected] Email: [email protected] 510095 Tel: 86-20-87318525 2009 Shanghai International Food Fair Fax: 86-20-87169011 Date: May 19-May 21, 2009 Packaging, Paper, Printing and Email: [email protected] Venue: Shanghai New International Expo Center publication Web: www.huimao.com.cn 2009 South China International Plating, Add: 1002, 1, 99 Nong, Jiangan Road, Shanghai, Coating, Surface Treatment Industry Exhibition China, 200233 Date: May 14-May 16, 2009 Tel: 86-21-29139210 Frequency: Yearly Fax: 86-21-54620298 Venue: Guangdong Modern International Exhibition Email: [email protected] Center Exhibits: Modified starch, sizing agents, functional 2009 The 13th China Bakery Exhibition papermaking chemical, etc. Date: May 21-May 23, 2009 Web: www.zaozhi8.cn Frequency: Yearly Add: 7 Jianzhong Road, Tianhe Science and Tech- Venue: China Export Commodities Fair Pazhou nology Park, Guangzhou, Guangdong, China Complex Tel: 86-20-85556058 Exhibits: bakery, refrigeration, fermenting and air- Fax: 86-20-85551758 conditioning equipment, hotel accessories, etc. Email: [email protected] Web: www.baking-china.com Add: Room 2004, Huangchaoge, No.4 Huacheng The 8th Guangzhou International Surface Food and Additives, Beverage, Avenue, Wuyangxinceng, Tianhe District, Guang- Processing and Painting Exhibition Drinks, Seasonings, Dairy Products zhou, Guangdong, China 510014 Date: May 18-May 21, 2009 2009 Shenzhen International Wine Festival Tel: 86-20-38207311 Frequency: Yearly Date: May 1-May 3, 2009 Fax: 86-20-38207311 Venue: Guangzhou International Convention and Venue: Great China International Exchange Square Email: [email protected] Exhibition Complex Exhibition Center Exhibits: surface processing materials and equip- Exhibits: Alcohol, wine, beer, brandy, liqueur, yel- ment, painting equipment, auxiliary products, indus- low wine, juice wine, healthy wine trial dope, electroplating process, equipment and Web: www.hanwaymesse.com auxiliary equipment, etc. Add: 18G, Hengfuxuan, Hengan Building, No.262, Web: www.sf-expo.cn Huangpu Middle venue, Guangzhou, Guangdong, Add: Room 1802, Huayou Building, No.5 Siyouxin China, 510655 Road, Guangzhou, Guangdong, China 510600 Tel: 86-20-85628215 Tel: 86-20-37599008 Fax: 86-20-85628215 Fax: 86-20-37599129 Email: [email protected] Email: [email protected]

2009 Shenzehn International wine Festival 2009 The 8td Guangzhou International Dope, Date: May 1-May 3, 2009 Printing Ink and Adhesive Exhibition Venue: Great China International Exchange Square Date: May 18-May 21, 2009 Exhibition Center Frequency: Yearly Exhibits: alcohol, wine, beer, yellow wine, juice Medical Care, Health Care Venue: Guangzhou International Convention and wine, etc. The 6th China (Shenyang) International Exhibition Center (Pazhou Hall) Add: 18G, Hengfuxuan, Hengan Building, No.262, Family Health Supplies IT Expo Exhibits: dope, printing ink and adhesive products, Huangpu Middle Avenue, Guangzhou, Guangdong, Date: May 22-May 25, 2009 chemical products and raw materials, production China 510655 Frequency: Yearly and package equipment, etc. Tel: 86-20-85628215 Venue: Shenyang Science Palace Convention Center Web: www.coatexpo.com Fax: 86-20-85628215 Exhibits: health supplies, health care equipment, Add: Room 1802, Huayou Building, No.5 Siyouxin Email: [email protected] organic agricultural products, etc Road, Guangzhou, Guangdong, China 510600

50 Tel: 86-20-37599008 Email: [email protected] The 2009 Suzhou Circuit Exhibition Fax: 86-20-37599151 Date: May 13-May 15, 2009 Email: [email protected] 2009 Dalian International Industry Expo Frequency: Yearly Date: May 21-May 23, 2009 Venue: Suzhou International Expo Center Frequency: Yearly Exhibits: manufacturing and design of various cir- Venue: Dalian Xinghai Convention and Exhibition cuit board, multi-layer board, soft board, etc Center Add: Rm 1005, West Building, Jinyulan Square, Exhibits: automation instrumentation andappara- No.1, Dapu Road, Shanghai, China, 200023 tus, electronic power, electronic component, water Tel: 86-21-63045419-277 processing equipment, heating, ventilating, etc Fax: 86-21-64181136 Web: www.dliif.com Email: [email protected] Tel: 86-411-83787049 Fax: 86-411-83787049 2009 The Fourth China International Starch Email: [email protected] and Starch Derivatives (Shanghai) Exhibition Date: May 13-May 19, 2009 Frequency: Yearly 2009 Dongguan international Textile Printing Venue: Shanghai Mart Exhibition Hall Industrial Technology Exhibition Exhibits: Starch and starch derivatives, etc Date: May 20-May 22, 2009 Web: www.cisie.cn Frequency: Yearly Add: Rm 300, 301, 1291 Zhongshanxi Road, Shang- Venue: Guangdong Modern International Exhibition hai, China Center Tel: 86-21-32098889 Exhibits: printing machinery, printing materials, etc. Fax: 86-21-32091252 Add: Science and Technology Center, 2nd Floor, Email: [email protected] Building 2, 42, Xisheng Street, Tongxin Road, Guang- zhou, Guangdong, China The 2nd Asia (Guangzhou) Flat Panel Display Tel: 86-20-83599695-108 Industry Exhibition Date: May 14-May 16, 2009 Frequency: Yearly Education, Training, Culture and Art Others, Comprehensive Venue: Guangzhou International Convention and 2009 Dalian Professional Education/Private 2009 The 3rd Guangzhou Buddhist Service Exhibition Center (Pazhou Hall) Education Exhibition and High School Products Fair Exhibits: FPD application product chain, LCD Enrollment Policy Consulting Conference Date: May, 2009 panel, LCD raw materials and component, LCD Date: May, 2009 Frequency: Yearly manufacture, etc. Frequency: Yearly Venue: Guangzhou Jinhan Exhibition Center Web: www.asiafpd.com Venue: Dalian Xinghai Convention and Exhibition Center Exhibits: incense and paper products, Buddha paint- Add: F2, North Yard Building, No.36, Longkou East Exhibits: middle professional education, etc ings, audio-visual products, lamps, gifts, souvenirs, etc. Road, Tianhe District, Guangzhou, Guangdong, Add: 14, East area, 18, Huizhan Road, Shahekou Dis- Add: 20 F Huangchaoge, Nantian Plaza, No.3, China 510630 trict, Dailan, Liaoning, China, 116023 Huacheng, Zhujiang New Town, Guangzhou, Guang- Tel: 86-20-85265586 Tel: 86-411-88816905 dong, China 510623 Fax: 86-20-87591374 Fax: 86-411-84809988 Tel: 86-20-38250644 Email: [email protected] Email: [email protected] Fax: 86-20-38250644 The 7th China International Marine Expo 2009 China (Rizhao) International Marine Date: May 21-May 24, 2009 Commercial Trade, Chain operation, and Fisheries Expo Frequency: Yearly Agency, Import and export Date: May, 2009 Venue: Qingdao International Convention Center 2009 China Fujian Commodity Trade Fair Frequency: Yearly Exhibits: ship technology and equipment, etc Date: May 18-May 22, 2009 Venue: Andongwei International Fishery Convention Add: Rm 501, No.121, Yan’ansan Raod, Qingdao, Frequency: Yearly and Exhibition Center Shandong, China, 266071 Venue: Fzzhou (Jinshan) Exhibition Center Exhibits: aquatic products, etc Tel: 86-532-8879127 Exhibits: import commodities, porcelain, resin, toy, Add: Rm 401-406, No.3 Haiqu Middle Raod, Ri- Fax: 86-532-83892050 furniture, shoes, oil painting, etc zhao, Shandong, China Email: 86-532-83892050 Web: www.fujianfair.com Web: www.jnhengzhan.cn Add: F16, Pingdong Office, No.128, Hualin Road, Add: No.26 Building, Lixia District, Jinnan, Shang- Xi’an International Finance and Investment Fair Fuzhou, Fujian, China, 350003 dong, China Date: May 15-May 17, 2009 Tel: 86-591-28309651 Tel: 86-633-2280966 Frequency: Yearly Fax: 86-591-28309638 Fax: 86-633-2280966 Venue: Xi’an Lvdi Bicycle International Convention & Email: [email protected] Email: [email protected] Exhibition Center Exhibits: finance institute, etc The 105th China Import & Export The Second International Confectionery and Add: No.4, Tangyan South Road, Xi’an, Shaanxi, China Commodities Fair (Spring) Banking Industry Expo Tel: 86-29-68910222 Date: Session I April 15-19, Session II April 24-April Date: May 13-May 15, 2009 Fax: 86-29-68918335 28, Session III May 3-May 7, 2009 Frequency: Yearly Email: [email protected] Frequency: Bi-yearly Venue: Shanghai Mart Exhibition Hall Venue: China Export Commodities Fair Pazhou Exhibits: candy and cake classic products and new The 2nd Wuhan Expo on Pregnancy Products Complex products, etc and Products for Infants and Children Exhibits: large scale machinery and equipment, Web: www.cbichina.net Date: June 1-June 3, 2009 kitchen ware, garment, small-scale machinery, Add: 2-1207, Jiaye Building, 21 Shunsantiao, Nan- Frequency: Yearly moto, household decoration, sports wear, etc. sanhuan East Road, Beijing, China Venue: Wuhan International Convention and Exhibi- Add: No.382, Yuejiang Middle Road, Haizhu Dis- Tel: 86-10-87675297 tion Center trict, Guangzhou, Guangdong, China Fax: 86-10-87682166 Tel: 86-27-87362659 Tel: 86-20-26088888 Email: [email protected] Fax: 86-27-87362987

51 Deputy Director of the National Orga- nizing Committee of the Shanghai 2010 World Exposition. ORld exp o Wan Jifei, Chairman of the CCPIT, w Deputy Director of the National Orga- nizing Committee of the Shanghai 2010 World Exposition and Executive Director of the Shanghai 2010 World Exposition Executive Committee, and Wang Jinzhen, Vice Chairman of the CCPIT, Member of the National Organizing Committee of the Shanghai 2010 World Exposition and Executive Deputy Director of the Liaison Group of the Shanghai 2010 World Expo- sition Executive Committee accompanied Wu’s attending.

Wu extended his congratulations on the Expo preparations and expressed his gratitude to those toiling behind the scenes for Expo. China aims to present an Expo that demonstrates the progress of human civilization, thus promoting world peace and prosperity, enhancing Expo Countdown Kicks off friendship between the Chinese people Guo Liqin and people all over the world, expanding huge countdown clock started ticking off the seconds, hours and days to the 2010 exchange and cooperation and spurring A World Expo May 1 in Tiananmen Square, Beijing. The steel clock stands at the the Chinese people to strive for a better west gate of the China National Museum in the middle of Tiananmen Square, with a society, Wu noted. height of 14.4 meters, a width of 5.5 meters and a total weight of 24 tons. It is at the po- He said the 2010 Expo with the theme sition where the Beijing Olympic countdown clock was and another two that marked the “Better City, Better Life” will display the return of Macau and Hong Kong to the motherland. When the curtain goes up on Expo fruits of urban civilization and promote the next May 1, the clock will display the number of Expo visitors each day. concept of urban development. It will be The Starting Ceremony of the Count-down Clock for the Shanghai 2010 Expo was a platform for people to exchange experi- solemnly held in Tiananmen Square, also in celebration of the one-year count-down to ences of urban construction and discuss the Expo’s opening. Chinese top legislator Wu Bangguo started the countdown clock urban and rural coordinated development, at a ceremony which was attended by government leaders and enthusiastic members of a better environment, a healthy lifestyle the public. Wu Bangguo, Member of the Standing Committee of the Political Bureau and sustainable development, he added. of the CPC Central Committee and Chairman of the NPC Standing Committee, Wang Wu said the Chinese Government and Qishan, Member of the Political Bureau of the CPC Central Committee, Vice Premier people have made a commitment to host a of the State Council and Chairperson of the National Organizing Committee of the “successful, splendid and unforgettable” Shanghai 2010 World Exposition, Yu Zhengsheng, Member of the Political Bureau of event. He promised that the organizer the CPC Central Committee, Secretary of the CPC Shanghai Municipal Committee would make every effort for the event and and Vice Chairman of the National Organizing Committee of the Shanghai 2010 World strengthen cooperation with all partici- Exposition and other officials of the National Organizing Committee, Executive Com- pants. Wu invited people from all over the mittee of the Expo as well as officials of the Beijing Municipal Government in charge of world to visit Expo and welcomed media expo affairs also attended the ceremony , hosted by Han Zheng, Mayor of Shanghai and coverage.C

52 Organizer unveils forum plans New Zealand Pavilion to focus on xpo 2010 is ex- ‘Cities of Nature’ experience Epected to invite the heads of nations and ew Zealand commissioner general for the 2010 World Expo in the Secretary General NShanghai, Phillip Gibson, said his country will invest 30 million of the United Nations NZ dollars (US$16.8 million) to build a 2,000-square-meter pavilion to a summit on “urban to focus on its “Cities of Nature: Living between Land and Sky” ex- innovation and sustain- perience. In a recent interview, Gibson said he believed the Shanghai able development” at Expo will historically be seen as an epic event. New Zealand’s much the end of the Expo in larger commitment to this Expo reflects the fast growing ties be- October next year where they will sign a “Shanghai Declara- tween China and New Zealand, he said. tion” on global urban development. “That is one of the reasons why we were among the first to ac- The organizer on May 11 announced the plans for Expo cept the invitation to participate. The resources and organization that forums and signed contracts with six Yangtze Delta cities where China is committing to the Expo are massive. New Zealand has been theme forums will be held. The six forums, to focus on urban- very grateful for all the cooperation we have been receiving,” he rural relations, environment changes, culture heritage and other said. “We hope that ours will be a strong contribution to this historic city-based themes, will be held about once every month during event,” he added. New Zealand announced its decision to participate the event in Nanjing, Suzhou, Wuxi of Jiangsu Province and in the Shanghai Expo during Chinese Premier Wen Jiabao’s official Hangzhou, Ningbo, Shaoxing of Zhejiang Province. visit to New Zealand in April, 2006. Up to 800 officials from Expo participants and experts “So planning and preparation have been underway for a good will be invited to take part in each theme forum. About 1,500 three years now. Milestones have included the selection of the Pa- to 2,000 people will attend the summit, which will also host vilion concept and design in late 2007, our signing of the official mayors of major metropolises, international celebrities and participation contract in May 2008 and the recent moves to start decision-makers in business, academic and cultural fields and actual construction on site.” he said. “Our participation in the Expo media representatives. is a major project for New Zealand and as for any such undertaking, The public will be invited to attend special forums which there will inevitably be challenges. But so far we are on target,” said will be staged up to next April. These forums will be held in Gibson, who also served as New Zealand’s commissioner general for the city’s districts, other provinces and other nations. There the Aichi Expo in Japan in 2005. New Zealand government’s invest- will also be international youth forums, culture and media ment in the Shanghai Expo is five times more than the Aichi Expo. forums. C Shanghai Expo’s theme “Better City, Better Life” is also a theme New Zealand is well placed to interpret. New Zealand is a highly urbanized country, with some 86 percent of its 4.29 million population living in cities and towns. New Zealand cities are rela- Hungary to focus on natural tively small with low population densities, and they have high quality of life ratings. The aim of the New Zealand Pavilion is to present resources and culture at Expo a welcoming vision of a nation that is striving to bring its cities into a sustainable balance with nature; a country in which natural beau- ungary’s aim at the 2010 World Expo is to introduce ty, the inspiration that it brings, and the lifestyles that it permits, Hthe country’s natural resources, people, economy and can exist alongside and contribute to a modern and innovative first culture to visitors from different countries, the Hungarian world economy. prime minister’s commissioner said. The theme of the New Zealand Pavilion is “Cities of Nature: “We don’t want to exhibit too many products, (and) Living between Land and Sky.” In its form and content the Pavilion our goal is to introduce our country, including natural takes inspiration from the Maori creation story in which the god resources, people, economy and culture,” said Andras Tane separated his parents, the Sky and the Earth, to create space Huszty, the PM’s commissioner for Hungarian-Chinese both for the natural world and for human beings. “Our Pavilion will economic relations and coordination of participation in be a distinctive one. It will be wedged shaped with a roof top garden the Expo. Huszty said that the Hungarian pavilion will that will be visually very attractive. We were fortunate to be allocat- be beautiful with a decoration of wood rods, and visi- ed an excellent 2,000 square meter site, close to the Chinese Theme tors will feel they are having a walk in a forest, he said. Pavilion, so our Pavilion will be very visible,” said Gibson. “The message we would like to send to the visitors of the A “Cities of Nature” experience in the Pavilion where visitors Shanghai World Expo is that Hungary is a good place will be taken through a day in the life of a composite New Zealand and we welcome Chinese people to our country,” said city starting from the sea, through the suburbs, the city center and Andras Huszty. out toward the mountains; various themes will overlap in this -- the About Hungary’s plan at the expo, Huszty said, “we progression of the day from dawn to dusk, from children to adults, must send a short and important message to visitors, be- New Zealand’s majestic scenery, New Zealanders as multi-cultural, cause they may stay in a pavilion only for 15 or 20 min- vibrant and creative, Gibson explained. Visitors will exit the Cities of utes.” Huszty said a new invention named Gomboc, cre- Nature experience near the top of the wedge, and will then walk back ated by two Hungarian mathematicians, will be displayed down toward the veranda area through a garden planted with New in the pavilion. It is the first known homogenous object Zealand trees and flowers, and making use of sculptural elements, with one stable and one unstable equilibrium point, simi- audio and lighting. lar to the shape of the Indian Star Tortoise. Gomboc is an- Gibson expects a total of seven million visitors to the New Zea- other world famous invention by Hungarians after Rubik’s land Pavilion during the Shanghai Expo period. “So our Pavilion will Cube, and a Gomboc weighing almost a ton will be put combine a range of characteristics -- distinctive design, creative high in the center of the Hungarian pavilion, Huszty said. The tech, but also culture and very much human interaction. We want it 2010 World Expo will strengthen ties between Hungary to be a total experience that showcases New Zealand and who we are and China, and hopefully Chinese people will show more as a country and people. And of course in doing so, we hope to make interest in Hungary after the expo, Huszty said. C a compelling impression on visitors.” said Gibson. C

53 c pit C ness of Chinese enterprises has a rapid CCPIT meet with Delegation increase; Chinese enterprises can go towards globalization through the platform of the United Kingdom. from Sino-Britain Trade Association Dong Songgen pointed out that CCPIT has three important platforms n April 25, Vice-chairman Dong Songgen met with President of Sino- promoting multilateral and bilateral trade Britain Trade Association Stephen Phillips and the delegation during the development, that is, exhibition, external fourth China Central Investment and Trade Expo in Hefei, Anhui. The liaison and legal services. With rapid two sides conducted exchange on further promoting economic and trade economic growth of China and continued relations between Britain and China , strengthening cooperation on coping with the expanse of foreign trade and economic Ofinancial crisis and doing more practical things for companies of the two countries. cooperation, foreign economic and trade Vice-chairman Dong Songgen said that CCPIT is in close co-operation with disputes are increasing. CCPIT has a Sino-Britain Trade Association. In February, this year, during Premier Wen Jia- glorious history and rich experience in bao’s visit to the United Kingdom, a series of economic and trade activities were co- Legal Services, and the United Kingdom sponsored, which promote bilateral trade and investment exchanges. CCPIT and has comprehensive laws and regulations Sino-Britain Trade Association and a wealth of practical experience in should practice the results of the arbitration and other legal aspects, Premier Wen Jiabao’s visit to the two sides have broad prospects in the UK, cooperate and strive to mediation, recognition of arbitration and open up a better economic and other legal services. trade relations future. After 30 Stephen Phillips said that Sino- years of reform and opening Britain Trade Association spoke highly up, China’s market has a very of the contribution made by CCPIT to high degree of openness. For the economic and trade cooperation, and the British companies, there are they are willing to continue to strengthen huge business opportunities in cooperation with CCPIT and will ac- central and western regions of tively maintain communication and con- China and the second-tier cit- sultation on specific matters relating to ies. International competitive- cooperation. C

China-Spain Investment & Trade Seminar Held in Barcelona

n April 24, the China-Spain Investment & Trade Seminar was jointly held of Spain’s trade with China, however in in Barcelona, Spain. As the first event of the Chinese Products Promotion an unbalanced structure, with potentials Week (Europe), the seminar aims to help the Chinese export enterprises to be explored. He hoped the Chinese and local governments learn about relevant laws and regulations and prod- delegation would expand economic and uctO quality standards of the EU. trade cooperation with Spain by learning Director Yang Xiaodong of CCPIT Media & Press Center led the Chinese delega- the economic characteristics and demand tion consisting of 20 members to attend the seminar. Nearly 80 representatives from the for products of Catalonia. European Commission, departments of the Catalonian government and enterprises in Mr. Antonio Montserrat, Director Catalonia, Spain attended the seminar. of the Catalonian Bureau of Commerce Director Yang Xiaodong delivered a speech on the seminar, on behalf of the CCPIT, of the Ministry of Industry, Tourism pointing out with the assistance of the CCPIT, Chinese and Spanish traders keep on ex- and Commerce of Spain, introduced panding fields for trade; Chinese enterprises have been aware of the quality standards for measures taken by the Catalonian export products and are now cooperating with member states of the EU, including Spain, government to strengthen cooperation to better understand the laws and regulations of the EU and to enhance the quality aware- with China as well as the economic and ness ; Chinese entrepreneurs have realized that some of the product standards of the EU trade development of China and Spain, have been made to guarantee the health and safety of its people in a more effective way; pointing out machinery and chemi- however, in the current economic situation, the most urgent task for all is to restore the cal industry is the highlight of China- world economic growth with all possible strength by containing all types of protection- Spain cooperation. He also stated that ism and maintaining the open and free environment for investment and trade; the EU’s relevant departments of the Spanish increasing trade restrictions may confer temporary interests on those carrying out them government had listed trade with China but will ultimately incur bigger surge of trade protectionism and thus offset the efforts as their major task in the coming few made by different countries to promote the recovery of the economy. years, with a lot of money and human Vice Chairman Joan Canals of Foment del Treball Nacional also delivered a resource to be put into cooperation with speech, pointing out under the current circumstances of financial crisis, China still China. He also introduced the projects maintains a relatively high rate of growth and has seen the rapid development of eco- of their enterprises on trade and invest- nomic and trade relations with member states of the EU, Spain included; Spanish en- ment supported by the Spanish govern- terprises harbor high expectation for China; the area of Catalonia takes up one quarter ment. C

54 G LOBAL

Navigating the Changing Economy:

— Challenges, Opportunities and Sustainable Growth

Guo Yan

fter 30 years of diplomatic and financial relationships, Chinese and U.S. corporation is more committed than ever to join- ingA together and turning their combined strengths into financial success while overcoming economic obstacles. Chinese business leaders have never been more ea- ger to gain critical knowledge, learn best practices, and forge robust networks and partnerships in overseas markets. Mean- while, their U.S. peers continually try to remain on the top of economic trends and be sensitive to policies changes in China, knowing that a deeper understanding of its culture and society is the key to success. Their joint wisdom and experience will be great valuable in hurdling obstacles in today’s economy, at a time when the opportunities of exchanging information and generation new ideas are more important to the goal of stimulating growth than ever before. China Institute, the New York City based cultural and educational nonprofit institution focused exclusively on China, held the 5th Annual China Institute Ex- President, Google Greater China, Peter ment intervention. Frank Ninggao Ning, ecutive Summit in Beijing on April 27, Rupert Lighte, Chairman, JP Morgan Chairman, COFCO Limited expressed 2009. Chase Bank (China), and Frank Ninggao that from the view of China, China is “We are extremely pleased to host our NING, Chairman, COFCO Limited, were not the central of the world crisis, but it first invitation-only Executive Summit in also the keynote speakers for the Sum- could comprehend the system of finance. China. The Summit brings together a se- mit. And the explored various topics and Though China and U.S implemented the lected group of business executives from issues include Tempting Risks: China’s stimulus packaged, their angles are dif- China and the United States for a forum Overseas Mergers and Acquisitions, 700 ferent. Due to the slump of export, China of open and constructive dialogue focused Billion + 4 Trillion: Unpacking the Eco- focus on its domestic market to promote on Chinese and American business part- nomic Stimulus Plans, Private Equity, the consumption; while due to the exces- nerships,” addressed Sara Judge McCa- Sustainable Development & Economic sive consume, U.S. started to encourage lpin, China Institute President. “The 5th Growth, Rural China: An Emerging Mar- to save their savings. “China now is keep- Annual China Institute Summit theme, ket, Real Estate: Into the Post-Bubble ing on investment, and it is necessary Navigating the Changing Economy: Chal- Era, Human Resource Strategy Amid Un- for them to grow to be more healthy and lenges, Opportunities and Sustainable certain Times, and Logistics and Trans- stronger. As for the outbound investment, Growth, is especially topical. Corporate portation in China. China enterprises should learn the lesson business leaders, entrepreneurs, govern- Both China and U.S. acknowledge from many failed examples and make bet- ment officials and economists will share that stimulus packages will create jobs in ter preparation.” Ning said. their expert opinions on diverse subjects health, science, infrastructure, and other Since the economic crisis, Chinese relevant to contemporary China-U.S. busi- sectors. When we compared the two “bail- companies are riding the new wave of ness activities and the global influence of out” plans from both nations, it tells that global M&A. Both size and scale of deals China’s rapidly growing economy. ”She one is reactive, the other preventative. In have hit new records. Fields of invest- addressed. combating the financial crisis, the largest ment have extended from traditional in- CHEN Feng, Chairman, Grand China developed economy and the most promis- dustries to finance and natural resources. Air, ZHU Min, Group Executive Vice ing emerging market in the world have The current financial crisis creates also President, Bank of China, LEE Kai-fu, both moved towards increased govern- many tempting opportunities for China’s

55 GLOBAL 56 However, he mentioned China Bluestar Bluestar China mentioned he However, market. overseas the to blindness their to due projects, investment outbound their in of lot successful so not were a companies Chinese years, two past the &Flom in said LLP, Meagher Slate, Arps, Skadden, Partner G.H.Miao, Yin Geogory one,” mentioned. conduct to considers it when market, and technologies resources, man hu the including M&A, overseas the to ty A abili digestion have should also company comfortable. feel not would one he at much time, so eats he if meals, having like “It’s just capability. own its to mation esti proper a and analysis practical a tion situa the give to head cool a keep should companies China market, overseas in ties opportuni much created crisis economic Industry the Lifan although that viewed Ltd (Group)Co., Chongqing Chairman, Mingshan, YIN strategy. abroad” “going comprehensive and cautious a out map to need past companies of Chinese deals, failure overseas the and situation nomic eco global current faced the of However, uncertainty the investment. outbound ------China, from SunTech from LDK Solar, from to China, China’sin market. opportunities and investment for tentials po and challenges major trends, on key views the their shared Authority Airport Municipal Dirk Jackson and CEO, B.Vanderleest, Limited Logistics Companies China Holding Grand Xiaomin, president, CHEN vice Airlines, Asia, Southeast Continental and Direc China Greater Managing tor, Dias, B. Walter ers. provid service logistic local for international and potential great both businesses offers and rewarding and vibrant the most of one become has industry logistics the airports, and ports shipping railroads, highways, of construction the in heavily invest to continues China logistics While and services. demand transportation modern escalating for an to leads economic growth unprecedented China’s them. of one was logistics and discussed, being operation. M&A overseas successful in example good a as Talking about the capital market in in market capital the about Talking topics other were there forum, the At - - - prospects for investment in rural China well. as China rural in investment for future prospects and state current the of opinions their commented panelists The foreign investors. and domestic for China rural in unfolding opportunities market different many the of few a just are infrastructure, rural in markets, investments fiscal large-scale and financial local to access loos ened areas, rural in scale of economies expected The crisis. financial present the from shelter some and forinvestment ties opportuni of venue new a offering kets, mar untapped currently the of potential in full its release gradually will China initiatives rural reform latest the lib eration, rights use land by spearheaded that an is discussed participants China market, emerging rural the whether on of topic round the In entities. advantages PE/VC local of comparative also the Experts analyzed Asia. in capital market venture (PE/VC) and equity private ac tive most the now is and years, few past the in miracles market capital numerous created has China Media, Focus to Baidu - - - - - EU-China Focus on Economic and Trade High-Level Mechanism

Guo Yan

n May 4, 2009, the Delegation of infrastructure and infra- of the European Commission structural investment is go- to China held a conference, on ing well, but EU would like which EU Ambassador Serge to see more private domes- AbouO addressed concerning EU-China tic consumption in China in Economic and Trade High-Level Mecha- order to rebalance domestic nism, the trade and investment between economy of China. The EU China and EU, and Shanghai Expo. congratulates China for Abou released the news that the sec- successful monetary policy. ond EU-China Summit held on May 7-8, Lending has increased very 2009 in Prague would be of great impor- fast in the last two months, tance for both sides. Commissioner Ash- which contributed to sus- ton responsible for trade policy, as well tained growth in China. as other 7 commissioners in charge of However, there are some transport, information society, customs, concerns about the quality environment, competition, agriculture, of the loans. There are also internal market and consumer protec- some concerns about ex- tion from the EU side would meet with change rate policy of China, Chinese Delegation including one Vice Chinese exports have decreased 5%, and Chinese currency being strongly linked Premier Wang Qishan, four Ministers and EU exports to China have decreased 27% with the US dollar, meaning there is a risk six Vice Ministers. from the same time last year. of China following the US dollar down- The high level dialogue was meant to “In the field of investment, not a sin- wards, which is not good for other trade deal with bilateral problems between EU gle European company closed its opera- partners, particularly Europe. We would and China, but with the current crisis, the tions in China or left the Chinese market, like to see China take into account other accent will be shifted from settling EU even if reducing their investment activity. major trading currencies, in particular the and China issues to trying to solve the Particularly in energy and climate change, EURO.” basic difficulties of the economic and fi- and related technology transfer, Europe is Abou expressed 2008 was the best nancial crisis. Also, at the end of the year still the first investor and the number one year so far during the 11th Five-Year Plan there will be an important conference in to transfer technology in China,” Abou period on energy intensity improvement Copenhagen where the negotiations for mentioned. and emission reduction for air pollution climate change should be concluded. En- A memorandum of understanding (sulphur dioxide) and water pollution ergy and environment issues would also on cooperation on energy efficiency in (chemical oxygen demand). “The FYP air be on the agenda. building was expected to be signed at the pollution target is now likely to be met Other items referred to further open- meeting, and also at the EU-China Sum- in 2009 (i.e. one year ahead of schedule), ing of trade and investment (to resist mit in Prague on May 20. The high level the water pollution target is also on track, protectionism); new business opportuni- dialogues yielded fruits including the while the energy intensity target now also ties for small and medium companies and agreement on cooperation for small and appears to be within reach although for their implementation in the Chinese mar- medium companies, setting up a centre for this to happen even bigger cuts than in ket, and vice versa; low carbon economy supporting such EU companies in China, 2008 will be necessary this year and next to promote the concept; the question of a memorandum of understanding on co- year. Considering the trend, and the fact technology transfer; consumer protection; operation in high technology goods, and (at that the economy is slowing down, it is innovation and intellectual property. the Summit) a agreement on organization likely that also the energy target will be EU trade is the number one trade flow of common scientific research and an an- met and possibly slightly exceeded. Yet, in the world, also the first trade partner nouncement of launching of proposal (call in his Government Work Report Premier of China, and China plays as EU’s largest for tenders) to build an EU-China energy Wen said that consumption of energy and supplier at mean time. Latest figure of EU- centre in Beijing. The related agreement other resources was ‘high’ and called en- China trade amounted to 326 billion euro was signed in Brussels in January. vironmental pollution ‘serious’,” he added. for the year 2008, an 8% increase from At the field of the economic situation Talking about the Shanghai Expo, the previous year. China exports to EU in China, Abou gave high evaluation on Abou expressed that the European Com- have increased 7% from 2007 to 2008, at China stimulus package, and said, “There mission would like to confirm once again 248 billion euro. And China imports from is a feeling of satisfaction about the fiscal that they will participate in the Shanghai EU reached 78 billion euro, a 9% increase stimulus package announced in last No- Expo. “We will share the pavilion of from 2007 to 2008. Trade deficit in 2008 vember and its fast implementation, and Belgium, which will hold the revolving was 170 billion euro, increasing 6% from the Chinese economy seems to have start- presidency of the EU during the 4 months 2007. In January 2009, due to the crisis, ed to recover from this March. Promotion of the Expo in 2010.” he said.

57 Updates 58 A Export Value Export TotalandImport Conventional Trade

deficit is -) deficit (surplusis+; Balanceport Ex and Import Value Total Import Value Total Export Item Processing TradeProcessing Rank 1 2 3 Table 2 Import & Export value by trading forms in April 2009 April in forms value byTable trading &Export 2Import Trading Forms Table 1 Brief on China’s import and export in April 2009 April Table in on China’s export and 1Brief import Partner Table 3 China’s top 3 trading partners in April 2009 2009 April in Table partners 3China’s 3trading top Japan Another Recovering MonthforIm/Ex pril, US EU - Absolute Value 170.734 170.734 13.135 13.135 78.800 91.935 Export Export Import Import Total Total Bilateral trade value trade Bilateral 18.45 23.76 27.3 April Unit: Billion USD Billion Unit: Unit: Billion USD Billion Unit: Unit: Billion USD Billion Unit: Increase ±% -22.8 -22.8 - -23.0 -22.6 Value 84.37 42.73 24.47 43.71 41.64 68.17 Increase (%) yoy Increase Increase (%) yoy Increase -23.8 -24.1 -17.1 Absolute Value 599.408 599.408 75.434 75.434 261.987 337.421 -23.2 -23.8 -24.8 -21.3 -18.7 -27.4 Jan. –Apr. Jan. Increase (%) mom Increase Increase (%) mom Increase Increase ±% Increase -24.3 -24.3 - -28.7 -20.5 10.3 9.9 8.1 16.4 12.3 14.9 8.3 8.3 5 is on the road of recovery, based on the the on (See Table month-to-month. 1) figure based recovery, of road the on is trade export and China’s import that trend import the show and to month second 6.9%, the 15.1%. is It increased export the 10.4%,trade which, among hiked April in value total the March, of compared figure the days, with working real monthly by Counted year-on-year. billion, decreased 23% US$78.8 import the while year, year-on- 22.6% down to billion, amounted US$91.94 value export the to value, the tal Among year. this quarter first of amplitude decreasing the with compared lower points percentage 1.9 but year, last period same the with compared creasing amounted to US$170.73 billion, 22.8% de April for value export and import total the of US$18.45 growth year, anet billion. year-on- growth achieved 32.4% billion, US$75.43April to trade January the from And surplus 28.7% year-on-year. billion, decreased US$216.99 import the while year-on-year, 20.5% down billion, US$337.42 to amounted value value, export the total the Among year. last period same the with compared 24.3% decreasing billion, US$599.41 to amounted months four first total the for the value export and import statistics, customs’ the to ing Accord year. this of months 4 first the in export and import trade foreign China of profile the announced China of Republic People’s of the of Customs Administration General 12, May On November. last from C Trading forms on-year, 8.3% growth month-on-month, month-on-month, growth 8.3%on-year, year- US$41.64 23.8% was decline billion, April in trade general in value export the specific, be To month-on-month. increase 12.3% but year-on-year down 21.3% lar, general dol US billion 84.37China’s for accounted trade April, In form. processing in trade of especially terms forms, in trading growth month-on-month a gained export and import the 2009, April According to the customs’ statistics, statistics, customs’ the to According The customs statistics show that in in that show statistics customs The the consecutive sixth month month sixth consecutive the trade, decreasing of month other an in be to continued 2009 export April, and import hina’s - - - - - Table 4 China’s top export provinces (cities) in April 2009 Provinces/Cities Unit: Billion USD The customs statistics show that in Item Guangdong Jiangsu Shanghai Zhejiang Shandong Fujian Beijing April 2009, Guangdong, as the largest im- Value 27.69 14.85 11.01 10.54 6.09 4.04 3.86 port and export province in China handed in a better performing sheet, with 6.6 per- Increase -16 -26.7 -25.8 -19.1 -20.5 -20.6 -13 centage points lower decline range com- Export (%) yoy pared with the national average. Increase 6.4 3.9 8 12.6 7.3 9.1 2.5 In April, Guangdong, Jiangsu, Shang- (%) mom hai and Beijing remained the tops, total trade value of which amounted to US$47.14 Table 5 Export value of main labor-intensive commodities in April 2009 billion, US$25.81 billion, US$21.65 billion, Unit: Billion USD and US$16.25 billion respectively, falling down by 18.1%, 24.8%, 26.4%, and 26.9% Increase (%) Increase (%) month- respectively as well. (See Chart 1) Commodities Export value year-on-year on-month The export value of the top trading Apparels 7.37 -11.2 3.9 provinces and cities still witnessed a nega- Textile 5.12 -14.4 13.4 tive year-on-year growth in April, however, Furniture 2.18 -8.2 2.7 at the meantime, a positive month-to-month growth. (See Table 4) Footwear products 2.06 -4.5 3.8 Plastic products 1.21 -5.7 11.9 Export & Import mix Suitcases and bags 1.15 0.4 22.4 Among the export commodities, the Toys 0.5 -10.9 18 labor-intensive products from China still showed a month-on-month growth in April. and the import value was US$42.73 billion, 18.7% fall year-on-year, (See Table 5) 16.4% hike month-on-month. In the same period, Chinese exports of mechanical and Meanwhile, the import and export of processing trade of April electronic products accounted for US$54.47 billion, 22.2% reached 68.17 billion US dollar, 24.8% decline year-on-year, 8.3% decline compared with same time last year, and 6.1% increase growth month-on-month. Among the figure, the export accounted compared with last month. for US$43.71 billion, 23.2% decreasing year-on-year, 5% increasing In terms of China’s import commodities, a positive year- month-on-month; the import accounted for US$24.47 billion, 27.4% on-year growth was achieved in some primary products in down year-on-year, 14.9% increasing month-on-month. (See Table 2) April. The trade value of primary products which China im- Trading partners ported this month amounted to US$21.55 billion, decreased by 32.4% year-on-year, however, increased by 16.6% month- The rank of China’s top 3 trading partners remained the same in on-month. April: E.U., U.S., and Japan. In this month, the bilateral trade volume Among them, iron ore imported 57 million tons, 33.2% between China and E.U. amounted to US$27.3 billion, falling 24.1% increased yoy, 14.7% increase mom. Import of crude oil y-o-y, 8.1% increase month-on-month. Sino-American bilateral trade reached 16.17 million tons, increasing 13.6% yoy, 3.7% in- value was US$23.76 billion, 17.1% decline y-o-y, 9.9% increase m-o- crease mom. Import of refined oil amounted to 3.7 million m. China’s trade volume with Japan in the fourth month this year ac- tons, 2.6% increase yoy, also 2.6% growth mom. In addition, counted for US$18.45 billion, 23.8% decrease y-o-y, 10.3% increase China’s import for soy beans had increased by 55.2% yoy, (a m-o-m. (See Table 3) slight increase of 0.7% mom), reaching 3.71 million tons. (See Chart 2) Meanwhile, in April 2009, China imported industrial Chart 1 China’s top trading provinces (cities) in April 2009 products for US$57.25 billion, 18.4% falling down yoy, 14.6% increase mom. Unit: Billion USD Among them, mechanical and electronic products were imported by US$38.39 billion, 20.2% drop yoy, 12.4% increase mom. Chemical products and related products were imported by US$9.15 billion, 18% decline yoy, 14.4% growth mom. 26 thousand units of automobiles and vehicles were imported in April, 31.4% decreased year-on-year, but 16.4% increased month-on-month. (See Chart 3)

Chart 3 China’s main import commodities in April 2009 Unit: Billion USD Chart 2 China’s main import primary products in April 2009 Unit: million tons

(Notes: All the data referred in the article are based on statistics from China Customs)

59 CHINESE tIPS 60 生词 Lily: 丽丽：根据新力公司官方网站的公告，他们不仅停止了相 David: 大卫：那么新力公司不再为一语网站提供服务了吗？ Lily: 丽丽：新力公司告一语网站违反了他们的合作协议。 David: 大卫：快说说，具体怎么回事？ Lily: 丽丽：被新力公司告了。 David: 大卫：被谁告了？ Lily: 丽丽：一语网站被告了！ David: 大卫：什么新闻？ Lily: 丽丽：今天又有新闻了。对话炒作知名度争议存在新生事物纠纷程序诉讼法院仲裁申请支持技术服务停止官方网站协议违反新闻

Please tell me what is going on after all. all. after on going is what me tell Please By who? By what’s new? So Xinli Company won’t provide services for Yiyu Web Yiyu for services won’t provide Company Xinli So 委员会申请了仲裁。关服务和技术支持，而且已经向中国国际贸易仲裁 site anymore? anymore? site support, but also apply to China International Economic Economic International China to apply also but support, technology and services related the stop only not they site, web official Xinli’s from announcement the to According agreement. cooperation Websitethe Yiyu of violating accused Company Xinli Company. by Xinli accused It was Website accused. Yiyu was today. Big happened news

Dialogue Vocabulary Vocabulary chǎozuò zhīmíngdù zhēngyì cúnzài xīnshēngshìwù jiūfēn chéngxù sùsòng fǎyuàn zhòngcái shēnqǐng zhīchí jìshù fúwù tíngzhǐ wǎngzhàn guānfāng xiéyì wěifǎn xīnwén 商业纠纷

N N N V N N N N N N V N N N e t i s b e V w l a i c fi f o N V N speculation speculation level popularity controversy exist things newborn dispute procedure lawsuit court arbitration forapply support technology service stop t s n i a g a o g protocol agreement; , e t a l o i v news Business Dispute - - 地方。丽丽： David: 大卫：近年来和网站有关的商业纠纷可真不少啊！ Lily: 丽丽：申请仲裁费用高一些，不过程序更简单。 David: 大卫：那在中国，哪个费用高一些？ Lily: 丽丽：没有。申请仲裁通常比提起诉讼要简单方便一些。 David: 大卫：没有向法院提出诉讼吗？ ( ＊注：“一语网站”和“新力公司”为虚构名称，请勿对号入座。 David: 大卫：商业纠纷的新闻也可以提高公司的知名度，达到炒 David: 2. 1.A+ 语法 Note: of theaction.Insuchasentence, A isoftenemphasized. the agreement? in item this cancel to suggest representative Chinese the Didn’t 中方代表没有提议取消合同里的这一项吗？ Haven’t anyoneknown this? 没有人知道这件事吗？ Examples: is similarto“whynot?” sentence the of tone The done. been hasn’t something why upon doubt speaker’s the express to question, negative of kind a is It The milkwasdrunkbyXiaoming. 牛奶被小明喝了。 His bookwastakenawaybysomebody. 他的书被人拿走了。 This websitewasaccused. 这个网站被告了。 Examples: 被没有……吗？ is a prep here, and B makes the acti on, while A is the object the while Ais on, acti the makes B and here, prep a is 被

作的目的。 Then in China, which one costs more? costs one which China, in Then Quite a number of business disputes involving website website involving disputes business of number a Quite Didn’t they submit a suit to the court? court? the to asuit Didn’t submit they The news about business dispute could raise the popular the raise could dispute business about news The controversies still exist in them. them. in exist still controversies and Trade Arbitration Commission for arbitration. for arbitration. Commission Arbitration Trade and simpler procedures. procedures. simpler with while expensive, more is arbitration Applying suit. a filing than easier and convenient more is for arbitration applying No. Usually Yes, the websites are newborn stuff after all, and lots of lots and all, after stuff newborn are websites the Yes, 是啊，毕竟网站还算新生事物，有很多存在争议的 +( B)+verb emerged in recent years. years. recent in emerged venience of expression. Please do not take them into shoes.) shoes.) into them take not do Please of expression. venience con the for just real, not is company” “Xinli and Website” “Yiyu pose of speculation. of speculation. pose pur the achieve to as so companies, involved the of ity Grammar - - - F eature

types of traditional Chinese herbal formulas. These medicinal herbs are now are widely used around the world, to treat pathologies An Efficacious Sage of Traditional that cause hypertension, diabetes mellitus, hepatitis, migraines, arthritis, eczema and cancer. The signs and symptoms related to Medicine in Modern Times these diseases are just some of the conditions that Dr.Wong has been able to treat with immense success. He has become an — Interview with Dr. Chi Wai Wong experienced family physician that continuously sees patients with illnesses related to r. Chi Wai Wong is a licensed the pain management, internal medicine, Traditional Chinese Medicine neurology, addiction, orthopedics, obstetrics/ (TCM) practitioner in New gynecology, and pediatrics. York who focuses on the healing When asked about Dr.Wong’s great- Dmodalities of acupuncture, herbology, Qi est accomplishment in his years of research Gong and medical massage (Tui Na). He for Chinese herbology, unquestionably, it is is a native from Shen Zhen of Guang Dong the development of the herbal supplement province in China. He received his Medi- called Wild Ginseng & Collagen Complex. cal Degree in China and became a surgeon Overall, the principle behind the combina- where he learned acupuncture anesthesia. tion this supplement is that these ingredients When he immigrated to United States, he together, make the body and its cells more established his family-run herbal dispensary viable and stronger; thus effective for treat- called Zhong Guo Yao Chai Inc. Since the ing diseases related to bone degeneration, development of his practices in New York alopecia, dermatology and supporting the City and Long Island, he has specialized in medicine for the field of Traditional Chinese immune system. the research and advancement of utilizing Medicine in China. He has been featured in Dr. Wong feels that with proper di- Chinese medicinal modalities for modern Time Out New York magazine, Newsday, agnosis and treatment, the application of clinical application. and NBC news. He has a weekly radio seg- TCM modalities can be an essential source Some achievements include being ment on 1040AM in regards to issues per- of therapeutic application. The fundamen- selected into the book of World’s Chinese taining to TCM and general health. tal principle of TCM is to prevent illnesses Who’s Who (2009); Chinese Overseas Who’s As a medical practitioner for over 35 through maintaining a healthy way of life Who Foundation (1993); the book of World’s years, Dr. Wong, has applied his clinical ex- and if one does get ill, he must use all the Who’s Who Foundation (1994); the book perience when participating in research and available resources to get better. From his of American Who’s Who and to be honor- publishing academic texts. His published experience, he finds that integrating Western ary president of the International Medical works include furthering the field of Qi and Eastern approaches to medicine is the Association (1995); and the Most Admired Gong (Energy Work) where he received an most effective. Dr. Wong not only strives to Man of the Decade (1998) for the Who’s award for Best Article, entitled the “Clini- promote TCM, but indirectly the preserva- Who’s Intellectual Foundation. At the pres- cal Effect of Inducing Medical Qi Gong: an tion of Chinese culture since it derives from ent time, Dr. Wong is an Associate Professor analysis of 40 Clinical Cases” at the First ancient Chinese philosophical thought. He for Beijing University of Traditional Chinese International Conference on Traditional has spent over thirty years lecturing in the Medicine, a consultant for the Association Rehabilitation of Medicine held in Beijing media and various universities along with of Hong Kong Orthopedic & Traumatol- in 1989. Currently, he is the Director of being published in journals and newspapers. ogy and is an author for various medical the World Academic Society of Medical Qi His aim is to determine the many ways textbooks, articles and journals in the areas Gong. In the area of Chinese Herbology, Dr. one can incorporate TCM in the daily life, of acupuncture, orthopedics and internal Wong has developed and improved over 200 through diet and nutrition. Being A Chinese, Behave Patriotic even Overseas r. Liao Zhifeng, the general Over the years, even though his business Giving advices and materials to the manager of Seychelles Chinese is very busy, Mr. Liao always tried to squeeze living country Seychelles Products Franchisee Ltd., also some time to visit the Zhongshan Overseas Mr. Liao also not only attached his the vice chairman of Africa Chinese Federation, and the local trade heart to the motherland, but also paid great ReunificationM Promotion Federation, and the department to bridge between China and attention to Seychelles. He has donated Secretary-General of Seychelles China Re- Seychelles, and furthermore to create more series of materials and money to the local unification Federation. cooperation opportunities for both parts. children village, primary and secondary Mr. Liao Zhifeng, 41 year-old overseas Recently, Mr. Liao Zhifeng organized Sey- schools and government agencies. Last year, Chinese, whose ancestral home is Lianzhou chelles delegation to participate in Zhongshan he donated more than 100,000 rupees worth afflicted with Guangzhou city of Guang- Economic and Trade Fair on March 28. of Zhongshan production traffic lights, for dong province, used to work and settle down Quotations the replacement of traffic lights at the junc- in Zhongshan city in 1985 and cultivated a ● “I have a profound and deep affection tion of the president House. strong connection with the city since then. for Zhongshan city, and great respect for Dr. Liao Chih-feng also persuaded his do- In the early 1990s, Mr. Liao went abroad and Sun Yat-sen.” mestic partners to donate to the Seychelles, settled in Seychelles, carrying on business ● “ I was born in China, and moved to such as Zhongshan Xiahu Family Garments upon international trade, car rental, eco- Seychelles. All the time, I concentrate on the Co., Ltd once sponsored uniforms and ca- tourism and etc., and also dedicating to the development and reunification of China, and sual wear for the Seychelles delegation for work for the local Chinese community. I always try my best to devote to the cause.” the 2008 Olympic Games.

61 nterview with Sun Bingzhong, I and His Sunmart

Li Zhuyi

n the morning of August 15, 2007, with a clear ring of gong, Wuxi Sunmart Holdings Pte Ltd officially got listed on the SingaporeO Stock Exchange. From this moment, a new member joined in “Jiangyin block” in Singapore. Following the successful listing of Yangtze Shipping and Junxin Science & Technology respectively in Singapore Stock Exchange and London Stock Exchange, Wuxi Sunmart entered the stock market full of completion as a dark horse. The major leaders of Wuxi government, Zhu Minyang, Gao Pei and Zhang Shixian, all attended the Wuxi Sun- mart’s listing ceremony. For the listing, Sun Bingzhong, the General Manager of Sunmart Holdings Pte Ltd, kept conscious of the great development opportunities and many challenges in the same time. Sun not only a single customer walking off from Wuxi Sun said with a confidence smile, “The experienced ups and downs during Wuxi Sunmart, but oppositely more and more common wealth will be created by all of Sunmart’s start-up phase, but also created customers came for enjoying Sunmart’s the community.” the brilliant today of Wuxi Sunmart, with sound production and service. From teacher to business leader his team together. In the daily changing In the mean time, Sun keeps good market economy, Sun successfully surfs communications with enterprises in the Sun Bingzhong was born in Xiake, on the tide of producing sectors in spray same industry circle. Not only communi- a small town in Wuxi, Jiangsu Province. pumps, aluminum cans and plastic bottles, cate with them upon the production offer- This is a beautiful place in southern China. fast flow of consumer goods (FMCG), ing time, quality insurance, and service As an outstanding teacher, if he had not medicines, as well as health products, as a after sale, but also Sun encouraged his sized the opportunity in 1998, he would captain. team to cooperate with the partners in div- have live in obscurity. However, excellent ers levels, involving technology exchange people are not always satisfied with their Manage the business and life with and guidance, and build friendships with current situation and are strongly willing honesty them. In the eyes of Sun’s business part- to chase their dreams. Sun once said, “For individuals, life ners, Sun is more than an entrepreneur. In March 1998, Sun decided to quit is the most important undertaking that They often invited Sun to deliver a speech his job, and started his business with 9 oth- needs a person devotes himself to manage, in their company, and shared with him of er people. Their company, Jiangsu Snow and the core belief that should be keep in his excellent business and life philosophy. Leopard Aerosol Spray Cans Co., Ltd., heart for both individuals and enterprises For getting along with the work staff, mainly specialized in high-quality spray is — Honesty.” Sun uttered that if an en- Sun insists that it is important to appreci- pumps that are widely used in cosmetics, trepreneur wants to gain development and ate and trust the staff, and to know how to pharmaceutical products, and health care success rather than earn some short-term think in their positions. Only in this way, products. profits, then the honesty is the first key fac- the employees will turn to understand their In the beginning, Sun encountered tor. “We should be honesty to our clients, boss. Thus the enterprises can own Cohe- his first setbacks throughout his business our fellows, and everyone in the society at sion. career. Low-quality products had let to a any moment,” Sun remarked. “Also, the enterprise should shoulder nearly zero profit rate in the first year after “We treat each client, even the small- its responsibility to assist the government he opened his company. In 1999, Sun also est customers with sincere credibility and to promote the local economy’s develop- lost a large business contract with Russian honesty. We took them as our intimate ment,” Sun expressed. “Although Xiake “Vodka” out of quality issue. friends and try our best to think in their is a relatively affluent city, for us it is not But, two heavy blows have not pre- position,” Sun said. Just due to the good enough. We still need to take continued ef- vented Sun from continuing his business. consideration for customers, there is not forts, and concern about the people here.” Instead, he tried his best to overcome the

62 constraints of technological bottlenecks. more fresh understanding and insights. control, infrastructure, human recourses, In 2003, all the shareholders, the manage- Sun said that the biggest problem encoun- automatic office, decision supporting, ment staff and a small number of technical tered by enterprises is how to be bigger electronic businesses. It includes Inspur staff form Jiangsu Snow Leopard Aerosol and stronger. Although Sunmart has taken server, microcomputer, network and net- Spray Cans Co., Ltd., jointly formed the a leading position in domestic market, working safety products and system inte- Sunmart Holdings Pte Ltd with a total it still has a large gap with international grating service. Note that the proportion of investment of RMB 4 million. The reason business giants. software investment in the whole plan has why Sun started Sunmart is that he wants Sun argues that domestic enterprises amounted to 1/3. Meanwhile, the period the business-creating process will be re- should help each other and learn from each for implementation is one year. Such big mained forever in people’s memory. other, so that the whole industry can have project is a great challenge to the three the strength for international competition. parties involved in the cooperation. Taking lead while fighting storm Investing heavily in standardize cor- Advance awareness and excellent un- Confucian entrepreneur value poration management, in Sun’s view, can derstanding (a special attribute that Confu- management effectively reduce the producing cost, rais- cian Merchants have) is the secret of Sun’s Sun Binzhong believes that the way of ing management, and boost up the fame business success in his industry. Starting management has direct effect on the devel- and standardization of the corporation. as early as possible is largely responsible opment of an enterprise. Therefore, Wuxi Although their products can cover the infor Sunmart’s fast growth, which displays Sunmart not only needs elite people but dustry in a vast scale, he still believes that the ability and sensitivity that an entrepre- modern management. The most significant they should have their core competitive- neur can grasp the market. case arising from this vision is the imple- ness to this industry. Actually, his foreign “We started a little earlier than others, menting information management project counterparts has accomplished great sales, and this is usually the key element that can in Sunmart. and Sun is more convinced of vast grow- decide the destiny of an enterprise,” Sun The sales revenue of Wuxi Sunmart ing space for Sunmart. said. rose from RMB 9 million in 1998 to RMB In comparison with advanced technol- At the time, many people still do not 350 million symbolizes the rapid growth ogy and sales model, Sunmart’s visionary know what the internet was, but Sun had of the company, but at the same time the idea and management is difficult for other frequently appeared on many leading pressure of management and human re- corporation to copy, which will definitely websites. Sunmart can become an industry sources and hierarchical information im- guarantee the company to keep ahead of leader in a short period of eight years, and balance have gradually become the barrier others in the field. this is the vision that Sun uniquely owns. of further development. When the majority of the industry Sun decided promptly invested RMB Quality and technology foster the started to fight for the domestic market, 15 million into implementing corporation company Sun Bingzhong placed his eyes on the information management project in order “For the manufacturing company, the international market. From the earliest to transform the company from a private products’ quality is the fundamental base fair for domestic exports, to exhibition and low-end company to a modern com- for development,” Sun said. He attached in Europe, North America, Africa, the pany with international standard. At the great importance to the quality on the ba- Middle East and Hong Kong, Sunmart has same time, Sunmart spent more than 10 sis of guarantee the producing capacity. It become the earliest “Go-Out”companies percent of company’s net capital to imple- is a production capacity & quality balance, in 2000. After several years of hard work, ment total solution with ERP/myGS-Smart which interrelated with each other. Sun ad- Sunmart’s foreign trade volume has ac- core technology. Despite the risks of the opted scientific development plan to adjust counts for 65 percent of the total company project and doubt from core leader group, himself. business. Mr. sun never wince back. “We made three plans per year: short Sun Bingzhong has his advanced He said, “Compared with RMB 70-80 term, mid term and long term.” All these views on international competition. He million investment on equipment, RMB 11 plans are made according to the previ- believes that cooperation among domestic million on management is not a big invest- ous status and prediction of market which enterprises can boost the international ment. Once the project can reduce the loss could guarantee both production and influence of China’s plastic industry as a from procedures, it is worthwhile.” sales.” whole. For domestic competition, Sun has After some pretesting preparation, His next quality plan is to establish Sun initiated to es- a standard 200 unit of area with all dust- tablish a management free workshop to launch into international mechanism that fit his market. Actually, the 100 tech members own situation. That is, are the core competition of the company. standardized spot management + logistics man- Further sailing agement + information To recognize the direction is the first management. With this step for a further sailing. The same to an conceit, he started the enterprise’s development. To Sun and his CAM (Computer-aided Sunmart, the future aim is to be an inter- management). The Inspur national company, and they are always ERP/myGS-Smart adopt- preparing for that. A further sailing is ed by Wuxi Sunmart cov- ahead. ers every management It’s no big deal for a person to own field, such as finance, some fortune. For someone who combines store management, wealth and philosophy together is much sales, buying, producing stronger. And from Sun Bingzhong, we plan, refining, quality could read this strength. C

63 At the same time, the company has won the honors of Outstanding Private Enterprise in Jiangsu Province, High-tech Enterprise in Jiangsu Province, Top 100 Packing Enterprise in Jiangsu Province, Quality Trustworthy Enterprise in Jiangsu Province, Top 100 Plastic Enterprises in China, Outstanding Packaging Enterprise in China, Nation Business Management Innovation Outstanding Demonstration Unit, the AAA Level Honesty Enterprise in China. New pages are being written down. Stories going on Located in Xuxiake Town Industry Zone, Jiangyin City, Wuxi Sunmart Science and Technology Company Ltd is a manufacturing company specialized in preparing mini-spray pump (valves) used for varies daily-chemical products, medicine, food, healthcare with assorted aluminum pot and plastic bottle ,and a member of China Packaging Federation (Metal Container Committee), China Health Scientific Committee, State Environment Protection Industry Association. Sunmart has a products mix of nearly 1000 specifications, such as press vacuum proportioning pumps (lotion pumps, crimp-on pumps, screw-on pumps), mini aluminum pot, and plastic bottles of PP, PE, PET series. Different from what the situation was ten years ago, right now Sunmart boasts of a registered capital of US$13 million, and the plants cover an area of 270 Mu, with a building area of 100,000 square meters. The company has 1,650 employees. The company has a total asset of more than RMB 400 million, and is equipped with more than 500 sets of advanced injection- molding and blow molding equipments in China, and 400 plus sets of aluminum punches, and four modern automatic assembly lines. Meanwhile, the company takes the advantages of over 50 sets of metal-processing equipments with high-precision molds, to meet special requirements from the costumers. Through virtual design, 3D modeling, dynamic simulation analysis and drawing, quick molds making, the company is capable of producing spray pumps (valves) of different specifications and injection products, aluminum cans, plastic bottles, and a purification area especially for preparing medicine packing material. Since 2005, Sunmart has become the leader in packaging industry in China who has the largest production and sale volume of spray pumps (valves), and also in Asia. In 2000, the company passed French BQI’s ISO9002 qual- A Decade Miracle: ity system certification; in October 2004 the company passed through the auditing by Shenzhen Huantong Certification Center and gained ISO9001-2000 quality system certification, therefore put all production process under the management of Wuxi Sunmart quality system. Wuxi Sunmart pays great attention to scientific and technological innovation, keeping on improving the science and Miracle started technology level of the stuff, and boosting the new products of A decade ago, Wuxi Sunmart was just no name. At that time, spray pumps (valves) development. During the past nine years few people noticed Jiangsu Snow Leopard Atomization Pot Industry since the foundation, the company has had an investment on Limited Company, which was established in early 1998, as it was a science and technology development amounting to 4% plus small workshop with a registered capital of only RMB 1.6 million. of the total sales income, and the employees engaged in sci- And that is where Wuxi Sunmart’s miracle initiated and grew from. ence and technology development has taken a share of more With ten years of development, Wuxi Sunmart Science and than 15% of the total staff. Till 2007, Sunmart has 33 products Technology Company Ltd now has a total asset of RMB 4 billion, (technologies) possessed state patent of intellectual copyright, with an annual output of various spray pumps (valves) of RMB 500 and 4 identified as provincial new products. million, and a sale volume of RMB 350 million. From those years ac- Furthermore, the lock spray pump (valves) developed cumulation, no name has grown up into a big name, not only nation by Sunmart won award of science and technology progress wide, but internationally. Its products are exported to more than 80 of Jiangsu Province, and new product award from provincial countries and regions, including North America, Western Europe, light industry office. And high grade spray pump (valves) was South Africa, the Middle East, Hong Kong and Macao. High reputa- awarded Star of the Creative Technology by the United Nations tion was received from the customers. (China), and the aluminum printing mini-spray pot for medical

64 And Sun presided and participated in several development projects of high science and technology high profitability products. With high quality and specialized products, the company has won fame both in domestic and oversea markets. Till now, with Sun and his staff’s great efforts, Sunmart has developed a product mix of nearly 1,000 specifications of spray pumps (valves), with many passed the technology examinations by national or provincial offices, and won awards including the United Nations (China) Inventions and Innovations Star Award and Jiangsu Province Scientific and Technological Progress Award. With the capacity continues expand and the sale volume increases, now Sunmart has become a star enterprise and high and new technology company in Jiangsu Province, and AAA Level Hon- esty Enterprise in China, and outstanding purpose has filled the blank space of this listed as one of the top 100 companies in private company in Jiangsu Province, and field in China, whose quality standard has Jiangyin City, and was nominated as one technology center in Wuxi City. reached advanced level in the world. of the top 100 good companies by Wuxi Rich life experience endow Sun with In 2007, the company manufactured municipal government. never-give-up gift. Sun has ever taken po- different kinds of spray pumps (valves) in Based on good performance, vari- sitions like teacher, director of school-run 500 million sets, and had a sale income to- ous channels of capital filled in this ten- factory and manager of school-run indus- taled RMB 350 million, including US$30 year-old enterprise. Better news is that, in trial company. In the hard times, he never million from foreign trade, and the profits August 2007, the company was officially forgot his dream: to be the best, to create a and taxes amounted to more than RMB 56 listed in Singapore. best company. Now, he made it. million. In recent years, the company was Titled with a MBA Chairman and Dream pursuer General Manager of Sunmart Holdings Facing the success Sunmart has cre- Pte Ltd, this listed company in Singapore Honors of Sun Bingzhong ated in the decade, more and more people Exchange, at the same time, Sun is also a admire the industry leader and its creator. member of municipal Science and Tech- Individual mem- Sun Bingzhong, an over 53 years robust nology Association, vice chairman of sci- ber and director of China businessman, is the miracle maker and ence and technology association in Xuxi- Association for Stan- also a dream purchaser too. With Sun’s ake Town, a member of China Enterprise dardization of General strong earnest to expand business, Sun- Directors Association, standing director Administration of Qual- mart once small company with a capital of China Packaging Federation, Metal ity Supervision, Inspec- of a few million yuan grows into a leading Containers Committee, and model labor in tion and Quarantine of light industry in China. C PRC(AQSIQ) company in China and Asia in packaging National indus- industry in ten years. Businessman in the try standard setter for BB/T0028-2004 press circle can never ignore Sunmart, which vacuum quantitative pump now ranks the first producer in Asia in the 33 patents of spray packaging owner output of spray pumps (valves). Member of China Enterprise Direc- Sun Bingzhong has rich experiences tors Association in enterprise management and operation, Standing director of Metal Containers and a hard spirit while pays great atten- Committee of China Packaging Federation tion on the market. Since he changed the Outstanding CIO in China in 2005 role from a teacher to an enterpriser, he Outstanding Entrepreneur of China has been engaged in spray pump (valve) Packaging Federation research and development. In recent years, under Sun’s operation, the research team 2001-2004 Advanced Worker in Ji- has gained 33 patents for new products. angyin City, Jiangsu Province 2002-2004 Outstanding Party Member of CCP in Wuxi City, Jiangsu Province 2005/06 Outstanding Director (Man- ager) in Jiangyin City 2006 Medalist of Wuxi City’s “May 1 Labor” 2006/07 Good Faith Entrepreneur in China 2007 Model Worker in light industry in China

65 RULE 66 pected of infringement according to the the to Measures. of these provisions relevant according infringement of pected sus goods the detain to Customs the with application an file shall it/he imported be exported, or to are that suspected infringement of goods the the detain to request Customs holders) IPR as to referred collectively (hereinafter agent its/his and prescribed the format. in attorney of power the produce shall it/he paragraph, the preceding of provisions the with China accordance in in agent its/his entrusting by tion representative offices or agents in China. in agents or offices representative holders their right entrusting by application an file shall intellectual overseas and agent, domestic a entrusting by or directly application an file may holders IPR do mestic GAC, the at IPRs Customs of their of protection filing handle or IPRs their the protecting for request measures take to holders Customs (“IPR”) right erty Chapter 1 General Provisions 1General Chapter referred to as the Regulations). the as to referred (hereinafter Rights Property of Intellectual Protection Customs on China of People’s Republic the of Regulations the menting imple effectively of purpose the for tions regula administrative China and laws of other and Republic People’s the of Law Customs the with accordance in mulated Article 4 Article 3 Article Where an IPR holder files an applica an files holder IPR an Where Article 2 Article 1 Article Decree of the GAC on May 25, 2004 shall be repealed simultaneously. repealed be shall theGAC2004 of May on 25, Decree 114 No. by promulgated Rights Property Intellectual of Protection Customs on China of People’sRepublic the of Regulations the Implementing for China of Republic People’s the of Customs of Gen Administration the eral of Measures The 2009. 1, July on effects take which promulgated, hereby is 17,2009 Feb. on (GAC) Customs of Administration General the of meeting executive the at passed and discussed Rights Property Intellectual of Protection Customs on China of People’sRepublic the of Regulations the menting of the People’s Republic of the for China Implementing Protection ofRights Intellectual Property Regulations of the People’s Republic of on Customs China The Measures of the General Administration of Customs of the People’s Republic of China for Imple for China of People’sRepublic the of Customs of Administration General the of Measures The

A consignee of imported imported of consignee A Where intellectual prop intellectual Where These Measures is for is Measures These Where an IPR holder holder IPR an Where easures of of the GeneralAdministration Customs ------mation according to law. to according mation infor open to obliged is provided Customs the that concerned, parties the se of crets business the keep shall Customs the Customs. the to statement written give shall consignees or consignors the or holders IPR the signers, con or consignees the or holders IPR the by Customs the to submitted evidences or documents relevant the in involved is cret period prescribed by the Customs. by the prescribed period the within Customs the to certifica documents tion relevant submit and truthfully declaration make shall consigners or ees consign the exported, or imported be to goods the of IPRs the of conditions the of extent. declaration requires Customs reasonable the a Where within it/him by exported or imported goods of the ofIPRs conditions the know shall consigners) or consignees as to referred collectively after (herein agents its/his or of goods consigner exported a or agent, its/his or goods contact persons; contact the of email and fax and telephone, name, holder; the IPR the of address and ality include the following contents: following the include shall application The GAC. the to cation the with GAC, anIPRIPRs holder shall submit anappli of protection Customs of 2 Chapter In implementing protection of IPRs, IPRs, of protection implementing In Article 5 Article (1) Name, registered place or nation or place registered Name, (1) Article 6 Article Filing of Intellectual Intellectual of Filing Property Rights Property

When applying for filing filing for applying When In case any business se business any case In

------holder, the copy of the business license or or license business the of copy the holder, evidences: or documents following the attach shall it/he GAC, the to filing for application the mits goods that it/he applied for filing. applied it/he that goods of class each for separately application submit an shall it/he trademarks, registered international of filing for applies holder IPR an Where filing. for applied it/he that IPR of item each for separately plication tures and price of the said goods. said of the price and tures fea main and goods, said the of exit and entry of place the of Customs the are known, that goods infringing the of exporter of and goods; said the price and features main exporter, and importer goods, said the of exit and entry of place the of by Customs the holders, exercised IPR legitimately is IPR whose of license; term and for use censed and alteration of patent right; of patent alteration and assignment and right patent of date cation appli and type name, works; of alteration and assignment and works of photograph of works, type time, finish of works, name trademark; registered alteration the of renewal and assignment, and trademark, registered the of period effective figure, trademark use, to approved is trademark the which to goods the of name and type (1) The copy of the ID of the IPR IPR the of ID the of copy The (1) Article 7 Article An IPR holder shall submit an ap an submit shall holder IPR An or importer and Manufacturer (5) goods the of origin and Name (4) (3) Name of the licensee, goods li goods licensee, the of Name (3) trademark, registered of Name (2)

Where an IPR holder sub holder IPR an Where ------copies of other registered documents; mit the notary or certification documents and administrative regulations before the (2) The copy of the Trademark Regis- for the relevant documents or evidences if expiration of the valid term of filing, or tration Certificate issued by the trademark necessary in its opinion. the IPRs that have been filed are assigned, bureau of the administration for industry Article 8 IPR holders shall pay the former IPR holders shall file an appli- and commerce under the State Council. In for filing when applying for handling fil- cation with the GAC for deregistration of case the applicant alters any of the items ing of Customs protection of IPRs or re- the Customs protection of IPRs and attach concerning trademark registration, ex- applying for filing after expiration with the relevant documents within 30 work- tends the trademark registration, assigns the GAC. The IPR holders shall remit the ing days from the date when the IPRs are the registered trademark or applies for fil- filing fee to the account designated by the no longer subject to the protection of laws ing of international registered trademarks, GAC through banks. The GAC shall issue and administrative regulations or the as- it/he shall also submit the relevant certifi- receipts when receiving filing fees. The signment comes into effective. If the IPR cate of trademark registration issued by charging standards for filing fees shall holders give up filing within the valid the trademark bureau of the administra- be made and promulgated by the GAC term of filing, it/he may apply to the GAC tion for industry and commerce under the together with other state department sepa- for cancellation of the filing. State Council. The copy of certificate of rately. If the IPR holders fail to apply for voluntary registration of copyrights issued IPR holders are not required to pay alteration or cancellation of filing to the by the department of copyright registra- the filing fee when applying for renewal GAC according to Article 11 and the pre- tion and the photographs of the works cer- or alteration of filing. ceding paragraph herein and cause seri- tificated by the department of copyright Where an IPR holder withdraws its/ ous impacts on the legitimate import and registration. In case an applicant fails to his filing application before approval by export of others, the GAC may cancel the make voluntary registration on copyright, the GAC or its/his filing application is re- relevant filing of IPRs on its own initiative it/he shall submit a sample of the works fused, the GAC shall return the filing fee. or upon the application of the parties con- that can prove it/he is the copyright holder If the approved filing application has been cerned. and other relevant evidences of the copy- canceled or revoked by the GAC or invali- When canceling any filing, the GAC right; and the copy of the patent certificate dated due to other reasons, the paid filing shall notify the IPR holder concerned in issued by the administration of patent fee will not be returned. writing and the filing of Customs protec- under the State Council. In case the pat- Article 9 The filing of Customs tion of IPR shall become invalid from the ent authorization has exceeded one year protection of IPRs shall take effect from date of cancellation by the GAC. from the date of public announcement, the the date of filing approved by the GAC for Article 13 The GAC shall notify the applicant shall also submit the duplicate a term of 10 years. If the valid term of an IPR holders in writing when canceling the of the patent register issued by the admin- IPR is less than 10 years from the effec- filing of Customs protection of IPRs in ac- istration of patent under the State Council tive date of filing, the valid term of filing cordance with the provisions of Article 9 6 month before the applicant submits an shall be the valid term of the IPR. herein. application for filing. Where the applicant The valid term of filing approved by Where the GAC cancels the filing and applies for filing of new utility model pat- the GAC before the implementation of the the IPR holder reapplies for filing of the ent or patent of appearance design, it/he Regulations or renewed upon approval IPR that has already been canceled for no shall also submit the patent right assess- shall be computed according to the former more than one year, the GAC may reject ment report issued by the administration valid term. the said application. of patent under the State Council. Article 10 IPR holders may, within 6 (3) Where an IPR holder allows any- months before expiration of the valid term Chapter 3 Detainment upon one else to use any of its/his registered of filing for Customs protection of IPRs, Application trademarks, works or patents, and enters submit a written application for renewing Article 14 Where an IPR holder into a license contract with it/him, it/he the valid term of filing and attach relevant finds any goods suspected of infringe- shall provide a copy of the license con- documents. The GAC shall make a deci- ment are to be imported or exported and tract; if no license contract is concluded, sion whether to approve it or not within 10 requests the Customs to detain them, it/he it/he shall submit a written statement on working days upon receipt of all applica- shall file an application with the Customs the licensee, scope and term of the license tion documents for renewal and notify of the place of entry and exit of goods ac- and other conditions; the IPR holders in writing. If renewal has cording to Article 13 of the Regulations. (4) The photographs of the goods and been refused, it shall give reasons thereof. If the relevant IPRs have not been filed at their packing whose IPRs have been le- The valid term of renewed filing shall the GAC, the IPR holder shall attach the gitimately exercised by the IPR holders; be computed from the following day of documents and evidences as prescribed in (5) Evidences of import or export of expiration of the valid term of filing and Item (1) and (2) of Paragraph 1 of Article the infringing goods that are known. In the valid term shall be 10 years. In case 7 herein. case the infringement dispute between the the valid term of the IPRs is less than 10 The IPR holder that requests the IPR holder and others has been handled years since the following day of the expi- Customs to detain the goods suspected of by the People’s Court or the competent de- ration of the previous valid term of filing, infringement shall also submit evidences partment of IPRs, the copy of the relevant the valid term of renewed filing shall be sufficient to prove the existence of such legal documents shall also be submitted; the valid term of the IPRs. infringement to the Customs. The evi- and Article 11 In case there is any dences submitted by the IPR holder shall (6) Other documents or evidences to change of the contents of the application be able to prove the following facts: be submitted as required by the GAC. submitted to the Customs in accordance (1) The goods that it/he requests the The documents and evidences sub- with Article 6 herein after approval of the Customs to detain are to be imported or mitted to the GAC by the IPR holders in application for filing of Customs protec- exported; and accordance with the preceding paragraph tion of IPRs by the GAC, the IPR holder (2) The trademark or work that has shall be complete, true and effective. In shall file an application with the GAC for infringed the special use right of its/his case the relevant documents and evidenc- alteration of filing and attach the relevant trademark is used in the goods or its/his es are written in any foreign language, documents. patent is implemented without approval. C Chinese version shall be attached. The Article 12 Where the IPRs are no GAC may require the IPR holders to sub- longer subject to the protection of laws (To be continued)

67 upply info List hold electric appliance across the country and the exclusive “Chinese famous Trade- mark” in solar energy industry and its brand 2009 China Markettification; most Suppliersof our products now have was valuated of RMB5.1 billion Yuan. passed CE certification. Our products have The Group has recently undertaken been exported to more than 30 countries on four national projects under 863 Plan, Company Name: Qingdao LiYikun and regions, mainly in Europe, Southeast owned nearly 200 patents, established Carbon Development Co., Ltd of Asia, America and Middle East. independent intellectual property system Company Profile: Qingdao LiYikun Contact Person: Kate and entered into photovoltaic, Winpin Carbon Development Co., Ltd located in Tel: 86-591-88071392 energy-saving glass, solar energy inte- Qingdao, China, is an integrated enterprise, Fax: 86-591-83845608 gration building and other fields to pro- specializing in manufacturing graphite base Post Code: 350001 duce solar water heater, vacuum heat col- products many years. The main products Email: [email protected] lection tubing, large solar energy water include graphite electrode, scale graphite, Website: www.changhuapower.com heating system. micronized graphite, expandable graphite, Contact Person: Xinwen Xue Continuous casting graphite mould and so Company Name: Hunan Ren Yuan Tel: 0534-2312963 on, which widely applied to the following Corp Fax: 0534-2312962 industries: metallurgy, machinery, electron- Company Profile: Hunan Ren Yuan Post Code: 253000 ics, battery, chemical industry, light indus- Corp industry group is tokes the agricul- Email: [email protected] try, military industry, national defense, and ture, the forest and the minerals industry Website: www.himin.com astronavigation and fire resistance industry. as the foundation, it is a stock enterprise, Contact Person: Yu Hua whose production and investment devel- Company Name: Longyan Zhuoyue Tel: 0532-85875203 opment is one body. It has 11 subordinate New Energy Development Co. Ltd Fax: 0532-85968205 product enterprise, which mainly produces Company Profile: China Biodiesel Post Code: 266071 the Daily products, Home products, kitchen International Holding Co., Ltd is an inter- Email: [email protected] & toilet products, Handicraft Decoration, national renewable energy corporation fo- the everyday use sundries, the festive pres- cusing on Biodiesel R&D, manufacturing, Company Name: MinDong ShengYuan ent, Solar lights the Canned Foods, the marketing and investment. Its major sub- Electromechanical Co., Ltd construction template the electrolysis metal sidiaries include: Longyan Zhuoyue New Company Profile: It is located in fa- manganese and so on, the many varieties Energy Development Co., Ltd. and Xiamen mous China MinDong Engine City-the city specification product, which are sells to Zhuoyue Biomass Energy Co., Ltd. zone of Fu’an Fujian. Its traffic is very con- European and American, the Southeast We demand large quantity of used venient, and environment is so beautiful. Asia country and the area, and have been cooking oil, palm acid oil, jatropha oil, Our company occupies 3600 with abundant received high praise by the domestic and coconut acid oil, sunflower oil, soybean strength and skill base. We produce all foreign customers . acid oil, or Rapeseed Oil as material to kinds of generators, electromotor, SY series The management of the company de- produce biodiesel. gasoline gene-sets and pump professionally. votes to humanist for foundation, strives Our leading product is Biodiesel Our products move off in the national mar- for perfection; The enterprise product (Fatty acid methyl ester), a renewable, ket and export to the international market, devotes to the item strives for new; the non-fossil fuel alternative to mineral and trusted by the customer. quality asks the essence, the cost to strive diesel. It can be used as a burning fuel. It is a modern enterprise with gen- for lowly, the benefit strives for high. It can also be used to synthesize many erator, motors and electric pumps as its The company insists taking the chemical products, or to be an additive in main products, and the establishment of good faith as the principle, makes the soap, PVC plastic and leather production. modern enterprise system as its goal. It enterprise the high quality brand. Greet- Our clients are some gas stations and strictly carries out ISO9001-2000 man- ing the challenge of the new century and many chemical factories. agement system and tries to create first honestly invites the domestic and foreign Contact Person: Sindy Wu -class product bands. It has strong tech- merchants, the union development, hand Tel: 86-597-5268800 nical forces, and its products include 20 in hand will create better tomorrow. Fax: 86-597-2281325 series and regions as Southeast Asia, the Contact Person: Frank Post Code: 364000 Middle East, Africa, America, etc. Tel: 0086-739-7223151 Email: [email protected] Contact Person: Jonathan Zhu Fax: 0086-739-7224389 Website: www.chinabiodiesel.cn Tel: +8613860383013 Post Code: 424322 Fax: +86-593-6580911 Email: [email protected] Company Name: Eversafety Precision Post Code: 355000 Website: www.hnrydk.com INdustry (Tianjin) Co., Ltd Email: [email protected] Company Profile: Eversafety Precision Website: www.minsun-motor.com Company Name: Himin Solar Energy Industry (Tianjin) Co., Ltd. is a Taiwan sole Group Co., LTD investment enterprise founded in 1996, Company Name: Fuzhou Changhua Company Profile: Himin Group is a inheriting Taiwan over 40 year professional Power machinery Co. Ltd large limited liability company integrating lock manufacturing technology and experi- Company Profile: We are professional R&D, manufacturer and marketing. The ence, its EVERSEF brand product with reli- electric machinery manufacturer in china, company has approx. 330 hectare in land able properties and good quality has been which specializes in producing diesel and area, 5000 staff members in Dezhou opera- sold well domestically and internationally. gasoline engine, diesel and gasoline gen- tion and more than 50000 employees na- Eversafety Precision Industry (Tian- erator, as well as diesel and gasoline water tionwide. The company was among the top jin) Co., Ltd. has passed the ISO9001 pump. Our company has obtained ISO9001 30 private enterprises in terms of taxation, international quality system certification certification and Chinese national CCC cer- one of top 5 of influential brands of house- and the U.S ITS tests and conformed to

68 ANSI grade III standard specification. Its past decade, GST brand has been glob- the network management. We mainly ex- yearly capacity is six million sets of lock ally recognized as one of the top brands port cashmere and cashmere yarns, cash- product and the quality warranty is 25 in the industry. mere sweater, clothing and other textile; years. With the development of the design Contact Person: Zhang, zheng red Beans products and steel strip prod- and research, many new projects such as 6 Tel: +86 10 82487789 ucts. The products are exported to Japan, ways latch project cooperated with Kwik- Fax: +86 10 82487779 the EU, the United States and Hong set, pad lock project are under execution. Post Code: 100080 Kong, etc. The major import deals are in It is also planned for future expansion. Email: [email protected] whey, lactose, fish meal, and amino acids Contact Person: Wilson Tang Website: www.gst.com.cn - based feed additives, chemical products Tel: 0086-22-26316688 and electromechanical products. Fax: 0086-22-26302666 Company Name: Shandonng Kangtai We are engaged in general trade, Post Code: 300402 Industry Co., Ltd feed processing, material processing, and Email: [email protected] Company Profile: Shadong Kangtai other import-export businesses. All the Website: www.eversafety.com Industrial Co., Ltd. (originally as Shan- staff of trade, declaration and bonded dong Zhaoyuan Kangtai Industrial Group warehouse is obtained professional and Company Name: Yantai Yongsheng Company) is located in Zhaoyuan, Shan- knowledgeable training, so they are ca- Plastic Co., Ltd dong—China Gold Town. This company pable of dealing business and responsible Company Profile: Yantai Yongsheng is a comprehensive company engaged in for their jobs. Customs declaration has Plastic Co., Ltd. was founded in 1991, lo- science, industry and trade. This company EDI channel; 570,000M2 bonded ware- cated at the junction place of Zhifu District, has 5 backbone enterprises, one technol- houses is managed by computer systems Fushan District and Yantai ETDZ. We ogy center, one overseas department and which can be used to contact with cus- mainly produce the plastic net including 4 sales company the above five enterprises tomers; our business entirely on the mar- shade net, dust protection net, wind protec- are: Taikang Massage Chair Factory, Yan- ket, scientific, professional operation. tion net, pe safety net, construction net and tai Zhaoyuan Automatic Center, Kangtai Contact Person: Li Changcheng pp woven bags and others with an output of Hardware Factory, Kangtai Baolei Door Tel: 0086-22-88233278-8007 more than 3000 tons. Company and Kangtai Toy & Gift Factory. Fax: 0086-22-88233708 The mainly products are: shade net, This company is elected as National High Post Code: 300221 dust protection net, wind protection net, and New Technology Enterprise, Shan- Email: [email protected] pe safety net, construction net, horticul- dong Contract-emphasizing & Contract- Website: www.tjcie.com.cn ture net and pp woven bags. We are the keeping Enterprise, AAA Enterprise of leading supplier to Japan, Canada, U.S.A. Shandong Agriculture Bank of China, Company Name: Henan,Luoyang Singapore, Australia, Dubai markets. Shandong Famous enterprise of China pat- Huadu Safe Group Co., Ltd We will supply series of service includ- ent, Shandong Customs AA Enterprise. Company Profile: Luoyang Huadu ing production, printing, packaging and This company is also the partner of Japan Jingui Jituan Co., Ltd the Henan province inspection with advanced and completed Panasonic Enterprise. This company Yanshi Pangcun industry district, and testing equipments internationally. passed ISO9002 Certificate in 1999. Mas- establishs to 1992, and registered capital We sincerely wish we could cooper- sage chair passed CE Certificate. Adher- 3000 thousand Yuan produce trademark is ate with clients worldwide, exchanging ing to the principle of “talents as basis, “Huadu”, is an anthology pestles the large the needed products, developing together. credibility as promise, clients paramount, specialization steel system office furniture Contact Person: MS.JIA perfect services”, the products are sold to enterprise group that design, production- Tel: 0086+535-2135221 30 provinces and cities in China and pare manufacturing and the sale service is to a Fax: 0086+535-6300317 6300357 exported to over 30 countries and districts man , in imposing state nation betweeing Post Code: 264000 including America, Europe, Mid-east, two parties the west area colleague’s trade. Email: [email protected] South-east Asia with deep trust of our Haveing six the most well-developed Website: http://www.ytys.cn clients. Thanks for supports and help from domestic digitals control cuts, dashes all the friends and experts, Taikang Group and rolls over the assembly line, and four Company Name: Gulf Security Tech- is booming. Now in the globalization era, automatic phosphorus static electricity nology Co., Ltd we would like to develop lovely and high spout the pipeline molding, and adopt Company Profile: GST, established in quality products together wit all the friends at present the most well-developed nine 1993, is one the world’s leading high-tech both at home and abroad. We would like to workman’s pre-editing system and static business specializing in the design, devel- contribute more to China. All the friends electricity to spout to mold technology opment, manufacturing and distribution are welcome for visitation and business to give birth to, and is living to choose of a complete range of fire alarm systems negotiation! the stuff and employs the stuff going up and fire alarm network products, security Contact Person: Kang Aijun and extremely observes and studies, and systems, building automation systems Tel: 86-535-8243917 chooses the intonation to go up the most and electronic power meters. GST is the Fax: 86-535-8930368 the high grade cold roll plate, and wheth- only enterprise in fire industry listed on Post Code: 265400 er or the steel is anticipated that the hard- the main-board of Hong Kong Stock Ex- Email: [email protected] ness is the vertical column and is put up change. Website: www.chinamassagechair.com plank and side plate, is still the underpin, GST products have obtained inter- and wholly overtakes domestic ordinary national recognition and are certified by Company Name: Tianjin Commercial mould criterion over 20% completely, UL, LPCB, CCC and CE. GST products Import & Export Co., LTD. and attains to overtake the supremeness have been sold in the Middle East, Asia, Company Profile: Tianjin Commercial profession criterion of country. Europe, Africa and America. GST pro- Import & Export Co., Ltd. is a professional Contact Person: Gao Hongxiao duction process and products strictly fol- Import and Export Corporation, belonging to Tel: 0379-67508888 low its quality control system in accord- Tianjin Yishang group Co., Ltd. which is one Fax: 0379-67508072 ing with international standards, such as of the top 500 corporations in China and has Post Code: 471936 ISO 9001, ISO 14001, and ISO 10012.1. a yearly turnover more than US$ 1.5 billion. Email: [email protected] With its successful performance in the We use modern high technology and Website: http://www.china-huadu.com