Business briefs..
Mind You own Business
Business briefs June 28th
The Shanghai share market continued to do well, supported by a whole
bunch of factors, not least of which is support for the rally from
Beijing. The People's Daily's article on why the government supported
the long-term development of the stock market didn't hurt a bit.
America Online has bought a 10 percent stake in China.com, a portal site
associated with Xinhua news agency which plans to list its share on the
NASDAQ stock exchange. If successful, it would be the first Asian portal
operation to be listed on NASDAQ, which is the largest hi-tech related
stock exchange in the world. The China Internet world is watching
closely to see how things play out and for indications of how many other
China-related Internet operations can follow China.com onto the world's
bourses and into a world of fame and riches beyond, well maybe within,
the dreams of Bill Gates.
It's getting easier for Chinese people from outside Shanghai to get jobs
in the top white-collar level thanks to new regulations aimed at
attracting top talent to Shanghai from other cities. People who wish to
come to work in Shanghai have at least a university degree and be no
older than 35. Special attention will be given to people in hi-tech
fields. State-owned firms are now allowed to give high-flyers
substantial salary rises to ensure they stick around.
The Linux operating system is making big strides, and while it doesn't
appear likely to challenge the overwhelming dominance of Microsoft's
Windows family of operating systems on the computers of the world, it is
becoming a serious player very quickly in China as well as elsewhere.
China's largest PC maker, Legend Computer Systems, has become the first
local computer manufacturer to back Linux, or rather a Chinese operating
system based on Linux. The huge advantage Linux has over its rivals is
that it is free. This is considered by most people to be an acceptable
price level. The Chinese Linux will be given free to hose who buy
Legend's Suresafe servers.
A new up-and-coming player in the Chinese Internet world is netease.com,
yet another portal hoping to play the role of gate-keeper as the masses
move online. In line with the topsy-turvy logic on the Internet economy,
Netease is already talking about doing an IPO -- a public sale of
shares. Go for it!! The company claims to have over 200,000 online
members already.
Statistics from the State Statistics Bureau indicate that consumer and
retail prices in China are continuing to trend down. The national
consumer price index (CPI) fell 2.2 percent in May, and the retail price
index was down 3.5 percent.
A shift in the insurance market - insurance companies have up to now
been able to encourage people to buy policies partly on the basis of
offering interest rates higher than those fofered by the banks. It's
been stopped. Insurance companies are now required to match bank
interest rates, which is expected to result in insurance premiums moving
up, and temporarily, life insurance sales heading south.
China's domestic banks have put otgether a huge loan package for the
Three Gorges project, the massive dam on the Yangtze River which is
expected to supply over 100 million megawatt-hours of power each year
when it goes into full operation somewhere around the year 2010.
The Hongkong and Shanghai Banking Corporation is reported to be moving
its China headquarters from Hong Kong to Shanghai and plans to expand
operations around China generally.
Prices for Wall's ice creams, a Unilever product, are coming down to
battle slugglish sales and cut-throat competition, as discussed here
earler. A Magnum ice cream (our favorite), which in pre-deflation days
sold for RMB 7.40, now goes for 5.50. No word on what ultra-quality
ultra-pricey Haagen-Daaz is doing to do to deal with this.
Private companies now account for about 10 percent of Shanghai's GDP,
officials say. They declined to speculate on how fast that number will
grow.
The Chinese Ministry of Education plans to launch a new national system
to test English ability in September. The new testing method is partly
financed by the British government with technical assistance from Oxford
University. No word yet on what the acronym will be.
The GM US$1.52 billion joint venture in Pudong has announced it will
produce a minivan at the factory, as well as the Buick sedans. Producing
the seven-seat wagon requires no extra investment, they said. Volkswagen
also announced it is developing a smaller, cheaper compact car for
Chinese consumers. Also in the auto area, the next generation of the
venerable China luxury sedan, the Red Flag, will be based to some extent
on the Ford Lincoln. It will be produced in a venture with the First
Auto Works in northeast China, which has produced Red Flags since the
days when they based on Russian luxury sedan blueprints.
The Pudong Development Bank has announced that it will offer student
loans to people planning to study abroad. The bank is offering up to
500,000 yuan to cover tuition and living expenses with payback over a
maximum of six years.
Nothing ventured, nothing gained: a farmer in Fujian is suing Motorola
for allegedly stealing his patented idea of a recessed power switch used
on some of the ubiquitous StarTAC cell phones. Zhang Zhanping has sued
Motorola for RMB 100 million in damages.
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