Business briefs..
Mind You own Business
Business briefs July 6th
All the main sections of the Yanan Lu Elevated Highway have now been
linked up and the project will be completed on September 15.
China last month lowered interest rates, partly to convince people to
pull money out of their savings accounts to either spend on the streets
or push into the stock markets. But surveys indicate that the move was
only partially successful. Two-thirds of urban Chinese residents said
they would not spend their savings in spite of the lower rates. The
surveys also indicated that home buying is now the number one concern of
families, which will eventually help to push the commercial housing
market to maturity.
The number of China's internet users will rise to 6.7 million by the end
of the year, and could rise to 33 million by 2003, according to a report
from BDA (China).
Quick stat: About 10 percent of Shanghai families now have a computer.
The China National Petroleum Corp. (CNPC) hopes to raise US$10 billion
through stock IPOs of H-shares in Hong Kong, ADR's in New York and
A-shares in China. If it happens, it will be one of the biggest IPOs in
Asia ever, outside of Japan of course. The aim of the listings are
intended to finance the restructuring of the state firm to make it more
competitive.
Nearly a decade after Chana's stock markets were revived, China finally
has a securities law. It went into effect from July 1. The law regulates
the issue and trading of shares, and establishes rules that are meant to
stop insider trading and various other kinds of manipulation.
During the first five months of the year, China received 28.83 million
overseas tourists, up 14 per cent over the same period last year.
Investment watch: In the first five months of the year, Shanghai
approved 585 foreign-invested projects, up 28 per cent from last year.
These figures do not indicate the size or nature of the investments, but
the implication is that money is now going into smaller, service
orientated businesses.
China Unicom, the second largest telecom firm in the country, is also
planning to sell shares worth around US$1 billion. But it must first
sort out the China-China-Foreign (CCF) finance scheme under which any
foreign companies put money into Unicom, only to have the arrangement
ruled illegal. Unicom is expected to become the biggest telecom provider
in China by the end of the year, thanks to fast growth ... and the
division of China Telecom into four smaller units. Unicom is focusing
more on the development of the Internet and CDMA phone systems. Last
month, it introduced Internet Phone services in twelve cities.
The Shanghai Stock Exchange is in discussions with NASDAQ on the
creation of an alliance. The ultimate aim would be for the two exchanges
to allow for the trading of stocks from the other bourse, but that could
take some time to put into effect.
There's a big debate in Fuzhou over sponsorship of school activities
after Pepsi donated 200 basketball backboards carrying the Pepsi logo to
schools in the city. One side says the donations help the schools and
the students, the other side say schools should be free from this type
of commercial activity.
China is now the second biggest producer of beer behind the United
States, with 20 million tons expected to be produced this year. This
compares to just 410,000 tons produced in 1979. The biggest beer
producers are Beijing's Yanjing Beer, Tsingtao and Guangdong Zhujiang
Beer. China's beer market is forecast to voertake the U.S. in beer
output by 2003.
And another one - China.com Corp., the Internet portal site related to
Xinhua News Agency, filed for a US$78 million IPO on NASDAQ. AOL bought
a 10 percent stake in China.com last month, and says it may buy an extra
15 percent.
In other Pepsi related news, Pizza Hut and KFC have decided to pay for
the use of muzak in their outlets in China. It's the first time that the
copyright holders of music have been compensated for the playing of
their works in fast food chains in China.
Volkswagen, the most profitable foreign JV in China, says it plans to
invest US$1.63 billion here in the next few years. Volkswagen-First Auto
(China) plans to produce a version of the Audi A6 for the Chinese
market, while Shanghai-Volkswagen will introduce a local version of the
Volkswagen Passat. It also plans to design and produce a car for the
masses priced at around 100,000 Renminbi for sale in two or three years
time. In terms of traffic on Huaihai Lu on a Sunday afternoon, this may
or may not be good news.
Privatization watch: Foreign firms are now been allowed to cooperate with,
or form joint ventures with, any private company in Shanghai. State-run
enterprises were previously given preference. Meanwhile, the National
People's Congress is working on a draft law aimed at regulating
privately owned enterprises, which will include the right of workers
there to set up trade unions. The law is also likely to state that firms
solely funded by household assets must take on unlimited responsibility
based on household assets to protect the interests of creditors. At the
end of May, there were 108,000 private enterprises in Shanghai. Most are
engaged in commerce and services, while industrial enterprises make up
around a quarter of the total.
The new convention centre over in Pudong, it is revealed, features a
pillar-free banqueting hall 4,600 square metres in area which can
accommodate 3,000 people and doors that are five metres high and weigh
one ton each.
Reports of an end to special tax breaks for foreign companies should be
treated with caution. Officials are stressing that any changes will be
introduced gradually.
The Singapore-sponsored Suzhou Industrial Park has closd after several
years of tough competition and increasingly difficult economic
conditions. The winner in the contest is the Suzhou New District, which
has the support of the local Suzhou city authorities.
WTO talks are stalemated at present, but China is planning to cut its
average import tariff from 17 to 15 percent next year.
Dazhong Taxi has decided to replace all its cars once a year in order to
reduce maintenance costs and benefit from higher second-hand car prices
for newer cars. The resale value of a taxi that's been pounding the
streets of Shanghai for four years is not high.
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