December 2009

CII & CII IBF & CCBC hold session CII India Business Forum (IBF) China in collaboration with the Canada China Business Council (CCBC) organized a session with Dr. Wendy Dobson, Professor and Co-Director, Institute for International Business, Rotman School of Management, University of Toronto, on 19th November in Shanghai. Dr. Dobson shared insights from her new book “Gravity Shift: How Asia’s New Economic Powerhouses Will Shape the 21st Century”. She provided a perceptive analysis of changing institutions, demographics, and politics and predicted that India and China would become the economic powerhouses by 2030. Dobson’s work anticipates that by 2030, China’s economy will be larger than those of the United States, India, and Japan, though its population will be ageing and its growth slowing. India will also come into its own, making major strides in modernizing its vast rural population, vanquishing illiteracy, and emerging as an innovative manufacturing Dr Wendy Dobson presenting her book “Gravity Shift: How Asia’s New powerhouse. She said that a China-India free trade Economic Powerhouses Will Shape the 21st Century” to Ms Riva Ganguly agreement could well become the foundation of a Das, Consul General of India in Shanghai, 19 November 2009. cooperative Asian economic community.

China International Leisure Industry Exposition Consulate General of India, Shanghai along with CII organized an ‘India pavilion’ at the fourth China International Leisure Industry Exposition (CILIE) held on 6-9 November 2009 at Hangzhou. The India Pavilion had eight companies from the travel, tourism and entertainment sectors showcasing their products and services. Chairman of the International Leisure Organization Mr De Lei Ke, Consul General of India in Shanghai Ms Riva Ganguly Das and Mr Wang Jiyun, President, CCPIT Hangzhou (L-R) Mr E B Rajesh, Chief Representative, CII Shanghai, Mr Wang Jiyun, inaugurated the ‘India Pavilion’. More than 80 President, CCPIT Hangzhou, Ms Riva Ganguly Das, CGI in Shanghai and Mr international organizations and companies from 20 De Lei Ke, Chairman of the CILIE at the inauguration of India Pavilion at countries participated in the event. CILIE Hangzhou, 6 November 2009.

CPAFFC delegation visits CII A 3-member delegation of the Chinese people’s Association for Friendship with Foreign countries (CPAFFC) led by Ms Lin Yi, Secretary General of China-India Friendship Association and Dir Gen Asian-African Division of CPAFFC visited CII CO New Delhi on 25 November 2009 and had an interactive session with CII officials. Ms Lin Yi briefed about the forthcoming activities being planned by CPAFFC to coincide with the celebration of the 60th anniversary of the establishment of the diplomatic relations between India and China.

Yunnan Business Delegation visits CII A 6-member business delegation led by Mr Ding Shaoxiang Secretary General of Yunnan Provincial government of China visited CII CO New Delhi on 20 November 2009 and interacted with CII officials. Mr Ding invited CII and its members to participate in the forthcoming meeting of the South Asia Business Forum and Kunming Business Exhibition.

India & China Indian Minister of External Affairs S.M. Krishna Meets With Liu Qibao Mr. S.M. Krishna, Minister of External Affairs on November 11 met with Liu Qibao, member of the Central Committee of the Communist Party of China and Communist Party Secretary of Sichuan Province, in New Delhi. Both sides agreed to further develop friendly and cooperative relations. During his visit, Liu also met with the leaders of the Communist Party of India (Marxist) and the Congress party (More). 1 December 2009

India-China bilateral trade (Jan-October 2009) Total trade Imports from China Exports from China Surplus

Value Growth Value Growth Value Growth Value Growth $34.338 billion -24.6% $23.596 billion -12.4% $10.742 billion - 42.2% $12.855 billion - Source: MOC, PRC

Huawei wins 9 million GSM line contract from BSNL Bharat Sanchar Nigam Ltd (BSNL) of India has placed an advance purchase order with Huawei of China on mobile equipment for 20 million GSM lines in the south zone. In the first phase, Huawei has been given a contract for eight million 2G lines in the south zone (More).

Wipro launches second facility in China Wipro Ltd on November 26 announced that it had launched its second facility at Chengdu (Sichuan province) in China that would provide IT and back office services to its global clients. This facility, which started operations with 100 staff, is planned to expand its strength to 1,000 people in future (More).

China plans to set up dedicated India fund ‘’China will explore the possibility of setting up a dedicated India infrastructure development fund to strengthen its economic and trade ties with this country’’, Ma Delun, Deputy Governor of the People’s Bank of China (PBC) told Financial Chronicle in an exclusive interview. Referring to the proposal for a dedicated India fund, he said, “As central bank of China, we will support anything that would facilitate economic and financial cooperation between India and China." Ma, who was on a week-long visit to New Delhi and Mumbai leading an 18-member delegation of Chinese bankers, regulators and industry representatives, did not elaborate on the size and investment of China's proposed India fund. Foreign exchange reserves-rich China has a $200-billion sovereign wealth fund, which makes strategic investments in overseas markets. (More).

China’s Economy China's economic growth to exceed 10% in Q4 According to a report of the China Construction Bank, the economic growth of China would exceed 10% in the fourth quarter due to climbing export orders and increasing domestic consumption. The report said China's full year economic growth would reach 8.3%, compared with Asian Bank's forecast of 8.2% in September and HSBC's 8.1%. China's exports are expected to pick up with trade surplus reaching $250 billion this year (More).

China's Major Economic Indicators (October 2009) • CPI: -0.5% (October), -1.1% (Jan-Oct) • Value-added of Industry: 16.1% (October), 9.4% (Jan-Oct) • Urban Invest. in fixed assets (100 million yuan): 150710, up 33.1% (Jan-Oct) • Retail Sales of Consumer Goods (100 million yuan): 101394, up 15.3% • Total Trade: $1.76 trillion, down 19.9% (Jan-Oct) • Exports: $957.36 billion, down 20.5% (Jan-Oct) • Imports: $798.13 billion, down 19% (Jan-Oct) • Trade surplus: $159.23 billion, down 27.2% (Jan-Oct) • FDI $7.1 billion, up 5.7% (October) • PMI (Non-manufacturing) Rose to 62.1% (Oct) • PMI (Manufacturing sector) Rose to 55.2% (Oct)

A stronger yuan in regional trade China's yuan (renminbi) is expected to play a bigger role in regional trade with the China-ASEAN Free Trade Area (CAFTA) becoming effective from Jan 1, 2010. "The upcoming CAFTA, which boasts the largest population among all the world's FTAs and allows zero tariff on 90% of products traded between China and ASEAN, will quicken the process of renminbi’s regionalization," said Xu Ningning, executive secretary general of the China-ASEAN Business Council (More).

Government & Politics President Obama visits China At the invitation of President of the People’s Republic of China, President Barack Obama of the United States of America paid a four day state visit to China from 15 to 18 November. The Presidents held in-depth, productive and candid discussions on US-China relations and other issues of mutual interest. They highlighted the substantial progress in US-China relations over the past 30 years since the establishment of diplomatic ties, and they reached agreement to advance US-China relations in the new era. (Text of Joint Statement; Coverage of Obama’s visit)

China's contribution to world's economic growth to exceed 20% According to Cheng Siwei, chairman of International Finance Forum (), China's GDP only takes up 6% of the world's GDP and average GDP ranks outside the top 100, so China is not likely to be a global leader, instead is just able to afford responsibility in accordance with its strength and development level. With GDP growth of 8% this year, China would contribute to more than 20% toward world's economic growth (More).

2 December 2009

China to open Beijing-Khartoum direct flight Hainan Airlines, a major Chinese carrier, is to open the first direct flight between Beijing and the Sudanese capital Khartoum next Tuesday amid booming trade between the two nations in recent years. The Hainan Airlines has another flight to Africa, Beijing to Luanda, capital of Angola, via Dubai (More).

$120 billion fund for ASEAN set to commence A $120 billion fund that will offer loans to Southeast Asian countries in economic difficulties will be ready as early as the end of the year, said Xiaosong, Director General for international affairs of the Ministry of Finance on October 29, 2009. The fund was established in May by ASEAN and China, Japan and South Korea. Japan and China will each contribute $38.4 billion to the fund, South Korea $19.2 billion and ASEAN nations the rest (More).

China’s overseas investment China’s overseas direct investment (ODI) has grown significantly recently, while the investment from traditional big spenders, including the United States and European countries, has slowed. China's ODI rose 190% year-on-year in the third quarter, bringing the total investment for the first nine months to $32.87 billion. Chinese officials are urging foreign countries to make it easier for that investment to continue to flow by creating a "convenient and fair" environment for Chinese investors (More).

Sovereign fund plans London arm China Investment Corporation (CIC), $200 billion sovereign wealth fund of China, has begun talks on setting up its first international office in London, a leading investment agency has revealed. The fund is known to have been looking for a base outside China for some time, and has been recently very active in the UK capital (More). CIC is also planning to apply for another $200 billion from the country's forex reserves for further investment (More).

Geely negotiating Volvo acquisition China's Geely Holding Group said on November 27 that it was having a "detailed and in-depth" discussions with Ford on acquiring Volvo. Ford put Volvo on sale in December and Geely offered to buy 100% of Volvo (More).

Wuhan buys stake in Brazilian mining company Hubei-based Wuhan Iron & Steel Group, China's third-biggest steelmaker, agreed to pay $400 million for minority equity of Brazil's mining company, MMX under the EBX Group, to broaden its supply of iron ore after more than a year's negotiations. Wuhan Steel, with an annual capacity of 30 million tons, will become the second-biggest shareholder by having 32.09% equity in MMX. Wuhan Iron and MMX also signed an agreement Monday to build a steel plant in Brazil. This month, the company won Australian approval for a $249 million investment in Centrex Metals. It also signed a long-term contract in November to buy iron ore from Venezuela's Venezolana de Guayana (More).

Zijin Mining announces takeover bid for Australian gold company Zijin Mining Group Co., China's largest gold producer and third-largest copper producer, announced on December 1 that it would pay $500 million to take over Indophil, an Australian gold and copper company (More).

Australia clears Chinese molybdenum investment Australian regulators have given the green light for Sichuan based Hanlong Mining Investment Pvt. Ltd to take control of an Australian molybdenum mining company, Moly Mines Ltd., for $200 million (More).

Ecuador, China to set up oil joint venture Ecuador announced on November 26 that it would work with China on a joint venture to explore an oil block in Ecuador. Sinopec International Petroleum will invest $1 - $1.1 billion to form a joint venture to exploit an oil block with proven reserves of 120 million barrels of crude in eastern Ecuador in cooperation with Ecuadoe's State-owned Petroecuador. Sinopec will hold a 40% stake in the joint venture. Ecuador, OPEC's smallest oil producing country, can pump out 500,000 barrels of crude each day (More).

Chinese premier announces new measures to enhance China-Africa co-op Chinese Premier Wen Jiabao on November 8 announced eight new measures to strengthen China-Africa cooperation in the next three years while addressing the opening ceremony of the Fourth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in the Egyptian resort of Sharm-el-Sheikh. The eight new measures, succeeding the eight measures put forward by the Chinese President Hu Jintao at the landmark Beijing Summit of the FOCAC in 2006, are aimed at pushing forward China-Africa cooperation in the next three years (Details).

China moves forward with FTA strategy The free trade area between China and ASEAN is the first of its kind for China. It is also playing a pilot role as China is eyeing larger foreign trade and deeper economic cooperation with other countries and regions. More FTAs between China and other countries or regions, including the one between China, Japan and South Korea, are under negotiation. After years of efforts, China has now 14 FTAs concerning 31 countries or regions under construction, covering markets at different levels in South America, Europe and Africa (More).

Mainland, Taiwan ink financial-service pact Taiwan and the Mainland China signed a financial service pact on November 16, paving the way for banks in China and Taiwan to invest in each other. This pact is expected to take effect within 60 days (More).

Coalmine blast claims 107 lives in China The death toll from the coal mine blast in Hegang, Heilongjiang Province of China rose to 107. The coalmine blast was caused due to mixing of bulk gas in the air supply system of the mine and a spark led to the explosion, according to the safety production committee of the Sate Council (More).

3 December 2009

RMB trade expands Bank of China () Ltd (BOCHK) announced on November 24 that it had signed the Agreements for Clearing and Settlement of Renminbi (RMB) Trade with a number of commercial banks in the ASEAN and other related regions and countries. The newly joined RMB Participating Banks in ASEAN countries include Bank Central Asia, Bank of China Bangkok Branch, Bank of China Manila Branch, Bank of China Jakarta Branch and Bank of China Singapore Branch (More).

China Mobile’s 4G-technology to be available in 2010 China Mobile, the largest mobile operator in the world, has now started to focus on its 4G strategy. It will start trial of 4G-network technology next year (More).

Business & Industry China plans to promote development of tourism industry China's State Council on November 25 announced plans to push forward the development of tourism industry and make it a strategic pillar industry in the national economy. The government called for improved service and management in the tourism sector, which consumes less resources and generates more job opportunities (More).

China opposes US anti-subsidy duties on oil well pipe China on November 25, voiced strong opposition against the United States' imposition of anti-subsidy tariffs on Chinese oil well pipes, saying the move was "discriminatory." The US made a decision on November 24 to impose duties ranging from 10.36% to 15.7% on Chinese oil well pipes for alleged unfair subsidies. Earlier this month, the US Commerce Department also slapped preliminary anti-dumping tariffs on the pipe up to 99% based on the allegation that "Chinese producers/exporters have sold OCTG (oil country tubular goods) in the US at prices ranging from zero to 99.14% less than normal value" (More).

China to be largest construction market by 2018 China will overtake the United States as the world's largest construction market by 2018, according to a forecast by Global Construction Perspectives and Oxford Economics on Thursday. The report said that in next ten years China's construction market would be worth almost $2.4 trillion and represent 19.1% of global construction output (More).

China nuclear power installed capacity expected to reach 70 GW by 2020 China's nuclear power installed capacity is expected to top 70 GW by 2020, 75% higher than the government's target, according to estimates by scientists. China currently has 11 reactors, with a total nuclear power installed capacity of 9.08 GW. It is further estimated that nuclear power generation capacity would go up to 200 GW by 2030 and to 400 GW by 2050 (More).

China to boost mergers in steel sector China will encourage mergers and restructuring in the steel sector to help forge three to five producers with sharp international competitiveness, said the Ministry of Industry and Information Technology in a statement on its website on November 10. A total of six to seven leading steel producers will be encouraged to implement strategic mergers and restructuring across the country, according to the Guideline to promote mergers and restructuring in steel sector (More).

Steel demand to spur ore prices Steel demand in China may rise 12% next year on booming property and auto demand, fueling gains in prices of iron ore, according to China International Capital Corp. (CICC). Domestic crude steel consumption may increase to 606 million metric tons in 2010, following a 14% gain this year to 541.4 million tons (more).

Iron ore imports fall 30% from September Iron ore imports by China declined 30% in October, from September’s record because of a national holiday. Imports reached 45.5 million tons. China faced a “severe oversupply” of the metal and the government was working on plans to curb excess capacity (More).

Laws, Rules & Regulations • Circular of the Ministry of Commerce on Delegation of the Authority to Examine and Approve the Establishment of Investment Companies by Foreign Investors • Circular of the Ministry of Commerce on Further Improving Examination and Approval of Foreign Investment • China issues regulation to encourage joint ventures.

Contact: CII China Office U. D. Bhatkoti, Advisor E B Rajesh, Chief Representative Confederation of Indian Industry Confederation of Indian Industry The Mantosh Sondhi Centre Room No 11A47/49, Shanghai Mart, 23 Institutional Area, Lodi Road, New Delhi-110003 2299 Yan'an Road (West), Shanghai 200336, China Tel: 91-11-2462 9994-7; Fax: 91-11-24601298 Tel: +86 (21) 62360969; Fax: +86 (21) 32283510 Email: [email protected]; Website: www.cii.in Email: [email protected]; Website: www.cii.in

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