Chinese language - Economist: China can evade US subprime debt crisis

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BIZCHINA / Voice

Economist: China can evade US subprime debt crisis

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-09-18 16:19

The subprime mortgage crisis in the United States has had limited impact
on China's economic entity, and China can evade related consequences,
according to two renowned Chinese economists, the Shanghai Securities
News reported today.

Wang Qing, chief economist of Morgan Stanley's Asia-Pacific region,
believes the Chinese economy will not slow even if the US suffers an
economic retreat.

In a public statement yesterday, former US Federal Reserve's Chairman
Alan Greenspan warned of the possibility of a recession in the US economy
amid significant inflationary pressures sparked by snowballing housing
prices.

Wang cited a ratio between government debts and gross domestic product of
18 percent in China, compared with the prevailing 40 to 50 percent in
newly industrialized countries. The figure indicates that China has
enough room for further expansion of financial policies.

Meanwhile, the great bulk of forex reserve will help China to
counterbalance external risks. Soaring investment in fixed assets will
fuel rapid Chinese economic growth at least another 10 to 15 years, Wang
claimed.

Another Chinese economist, Gao Ting, deputy general manager of China
International Capital Corp Ltd's research department, also showed little
concern over the Chinese stock market's liquidity, as long as the bad
subprime debts problem remains confined to the financial field.

Gao said there are some ways to relieve the impact of US' subprime
mortgage crisis.

The US Fed and other nations' central banks will make efforts to prevent
the crisis from spreading, either by injecting money into the markets or
by elevating interest rates.

Additionally, upgrades to China's own export structure will make the
country more flexible in front of a demand shift in the foreign market.
And China is also capable to stimulate the domestic demand via proper
financial measures.

Today, the US Federal Reserve policymaking board plans to meet and
consider a rate cut of an expected quarter of a percentage point, to 5
percent.

Later this week the major US investment banks, including Bear Stearns,
Lehman Brothers, Morgan Stanley and Goldman Sachs, are to report their
third-quarter fiscal results. Losses from the bad subprime mortgage loans
will be public.

On Monday, Bear Stearns fell US$1.81 to US$115.38; Lehman fell 88 cents
to US$58.62; Morgan Stanley fell $1.20 to US$64.91; and Goldman fell
US$2.98 to US$187.61.

?

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Learn Chinese - ADB: China's GDP growth to hit 11.2%, CPI to top 4% in 2007

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BIZCHINA / Center

ADB: China's GDP growth to hit 11.2%, CPI to top 4% in 2007

(Xinhua)
Updated: 2007-09-17 13:59

Brisk exports, strong investment and buoyant consumption will lift
China's economic growth to 11.2 percent this year, up from an earlier
estimate of 10 percent, with the inflation rate breaking 4 percent, says
an Asian Development Bank (ADB) report released?in Beijing?on Monday.

"The faster than expected growth momentum built up this year is expected
to carry into 2008," said Zhuang Jian, senior economist of ADB's China
Resident Mission, at a news conference.

Related readings:

?China lagging in economic well-being - ADB
?ADB: China should avoid drastic policies to curb growth?Asian economy to
attain 8.3% growth this year: ADB

The new ADB report also forecasts that China's GDP growth in 2008 will
reach 10.8 percent, revising from the 9.8 percent in an ADB report
published in March.

Zhuang said China's economy grew at a faster-than-expected 11.5 percent
in the first half of 2007, which is the highest rate since 1994.

According to Zhuang, China's fast economic growth was led by industry,
especially in such sectors as steel, electricity, chemicals, and oil
processing.

Strong profitability, buoyant sales and still-low lending rates also
drove investment during the period.

The ADB report said investment administered by local governments grew by
28.1 percent in the first six months, nearly doubling the equivalent
central government rate.

China's inflation barometer - the Consumer Price Index (CPI) is estimated
to hit 4.2 percent this year and 3.8 percent in 2008 as against the
previous forecasts of 1.8 percent and 2.2 percent respectively, according
to the ADB report.

Zhuang said rising global grain prices and a pig disease outbreak led to
rocketing food prices, but this is expected to ease next year, paving the
way for the implementation of planned reforms in the pricing of
state-controlled sectors such as water, power and natural gas.

Significantly higher than expected inflation, however, poses a risk to
the outlook. Zhuang said adverse weather would lower domestic grain
production at a time when imported grain prices are high.

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Learn Mandarin online - China mulls cooling shipbuilding industry

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BIZCHINA / Center

China mulls cooling shipbuilding industry

(Xinhua)
Updated: 2007-09-15 03:18

China's top economic planning organ is considering limiting investment in
large-scale shipbuilding projects to prevent the market from overheating,
according to the China Securities Journal.

The National Development and Reform Commission (NDRC) and the Commission
of Science Technology and Industry for National Defense (CSTIND) were
reportedly working on regulations and policies that require state
approval for shipbuilding projects exceeding 100,000 tons.

The policy meant that projects of more than 100,000 tons should be
approved by NDRC, while the rest should be referred to local governments,
said analysts with Bank of China International (BOC International).

The regulations would aim to upgrade the structure of the industry and
curb overheated competition within the industry, analysts said.

But there was no clear timetable for implementing the regulations, said
the sources.

China's shipbuilding industry developed rapidly in the first half of
2007, with ship completion up 43 percent and orders surging 165 percent
over the same period last year, giving it the largest number of new
orders in the world.

The production capacity of the ongoing and planned projects have reached
40 million dwt (dead weight tons), far exceeding CSTIND's goal of
achieving annual productivity of 17 million deadweight tons in 2010.

"But there has been no over-production," said sources with CSTIND.

The previous goal could be geared upward as the international market
demand had increased in recent months, said the sources.

According to statistics from the UK-based Clarkson World Shipyard
Monitor, shipbuilding orders worldwide have reached 107.7 million dwt and
completed shipbuilding projects reached 37.6 million dwt in the first
half, up 28 percent and 8.4 percent respectively from the same period
last year.

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Chinese Online Class - CSRC: Time ripe to launch corporate bonds

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BIZCHINA / Top Biz News

CSRC: Time ripe to launch corporate bonds

By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-09-13 15:05

Time is ripe for China to launch corporate bonds and furthermore, the
interest rate hike expectations won't affect the trial issuance of bonds,
according to Tu Guangshao, vice chairman of the China Securities
Regulatory Commission (CSRC), the Shanghai Securities News reported today.

Tu said the CSRC would let foreign firms issue corporate bonds in China
when the appropriate time arises.

Related readings:
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?CSRC will approve corporate bond issuance

Special Coverage:
Markets Watch??

Tu also said the development of corporate bonds can help improve the
direct financing percentage and develop a multi-layer capital market.

According to a rule released by the CSRC to guide the issuance of
corporate bonds last month, only companies listed overseas and on the
Shanghai and Shenzhen exchanges are allowed to issue corporate bonds. A
number of companies have put forward plans for corporate bonds issuance.

Tu stressed that interest rate hike expectations won't impact long-term
development of corporate bonds, although it will affect different listed
companies' issuance times.

The CSRC will encourage companies to issue corporate bonds by different
means to allow more investors to participate in the market.

Trust companies can act as trustees when entering the corporate bonds
market, Tu said. They are expected to have more opportunities in the
corporate bonds businesses as the market develops.

Currently, only a handful of large State-owned enterprises approved by
the National Development and Reform Commission can issue such bonds. The
price and amount of bonds issued are decided by the commission, and the
State commercial banks are also required to underwrite the bonds.

Just 283.1 billion yuan (US$37.5 billion) of corporate bonds had been
issued by the end of last year, accounting for only 1.35 percent of gross
domestic product, far lower than the 40 percent in the United States and
17 percent in the Republic of Korea.

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Chinese Online Class - China bans lead paint on toy exports to US

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BIZCHINA / Center

China bans lead paint on toy exports to US

(chinadaily.com.cn)
Updated: 2007-09-12 11:16

China signed an agreement Tuesday to prohibit the use of lead paint on
toys exported to the United States, in the wake of the recalls of
millions of playthings decorated with paint containing the toxic metal.

The pact was unveiled at the second joint US-China summit on consumer
product safety. In the pact,?China also pledged to step up inspections of
its exports and take other steps to ensure that those products meet US
standards, said Nancy Nord, acting head of the US Consumer Product Safety
Commission (CPSC). That will include joint efforts by the two countries
to increase understanding of those standards among manufacturers and
exporters.

Related readings:

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?China to take measures to ensure toy quality
?More action urged on toy quality

The absence of such an understanding allowed paint suppliers to provide
lead paint to companies making toys sold by Mattel Inc and other
companies, said Wei Chuanzhong, vice minister of China's General
Administration of Quality Supervision, Inspection and Quarantine. Lead
paint has been banned on toys made in the US since 1978.

"That's why we decided we should intensify the exchanges between
importers and exporters in the field of standards," Wei said.

US and Chinese regulators also agreed to hold regular product safety
talks, including monthly discussions of recall activity and trends, Nord
said. China also will help CPSC trace products to their source when
problems do arise.

The United States and China also agreed to cooperate on improving the
overall safety of the latter country's toy exports, as well as fireworks,
cigarette lighters and electrical products.

"This is an important signal from the Chinese government that it is
serious about working with CPSC to keep dangerous products out of
American homes," Nord said.

But Wei stressed that most Chinese exports are safe, echoing a line
that?China repeatedly has used in defending the quality of its products.
While acknowledging more could be done, Wei said that 100 percent safety
was impossible and warned against overemphasizing what he characterized
as limited problems.

"We should not over-propagandize the problem," Wei said.

China has faced stiff pressure this year after an array of its exports,
including toys, pet food ingredients, fish and jewelry, have been
recalled over health and safety concerns.

Mattel Inc, the world's largest toy company, announced a third major
recall of China-made toys in more than a month on September 4 because of
excessive amounts of lead paint. The latest action involved about 800,000
toys.

Mattel Inc recalled 18.2 million toys made in China on August 14, about
half of them sold in the United States, because they contained lead paint
or tiny magnets that could damage organs if swallowed by children. Mattel
said the recall covered 63 different toys, made since 2002 and sold
before January of this year, including 44 Polly Pocket toys, 11 Doggie
Day Care toys, 4 Batman toys, a One Piece toy and two Barbie toys.

On Aug 1, Mattel's Fisher-Price division said it was recalling 1.5
million China-made pre-school toys featuring characters such as Dora the
Explorer, Big Bird and Elmo because of lead paint. That action included
967,000 toys sold in the United States between May and August.

?

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Learn Mandarin online - MOF to slow down tariff rebate adjustment

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BIZCHINA / Center

MOF to slow down tariff rebate adjustment

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-09-10 15:50

The Ministry of Finance (MOF) will reduce the frequency with which it
releases new policies to further adjust export tax rebate, in an effort
to maintain a stable policy framework on foreign trade, said a principal
from the MOF's tariff policy department, the Shanghai Securities News
reported today.?

Related readings:
?Tax rebate cut changes textile export strategy
?Flurry of export activity as tax rebate deadline looms
?Tax rebate cut as rebalancing act
?China to eliminate export tax rebate on steel tubes

Since the beginning of this year, a slew of policies, such as the
integration of income tax rates for domestic and foreign-funded
enterprises, strengthening macro management of the realty market, and new
policies on tariff rebate and processing trade, have been launched to
encourage Chinese enterprises to improve competitiveness, upgrade export
structure, and curb the trade surplus.?

In particular, tax rebates for more than 2,800 export items were either
eliminated or reduced on July 1, impacting a lot of export-oriented
processing enterprises in economic development zones.?

The frequent export tax rebate adjustment went against a stable policy
framework. As a consequence, there will be only a few minor modifications
to national policies in future, said the source.

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Chinesepod - CCB to set up leasing company with Bank of America

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BIZCHINA / Center

CCB to set up leasing company with Bank of America

(Xinhua)
Updated: 2007-09-08 15:56

China Construction Bank (CCB) said the country's banking regulators have
approved its plan to set up a financial leasing company with Bank of
America to provide leasing products for Chinese customers.

The approval came six months after the China Banking Regulatory
Commission lifted a decade-long ban on commercial banks investing in
financial leasing companies.

The new joint venture will be the first of its kind between a Chinese
bank and a foreign investor.

CCB, one of the big four State-owned commercial banks, will have 75.1
percent of the 4.5-billion-yuan (US$600 million) company, while Bank of
America will invest 1.12 billion yuan for a 24.9-percent stake.

"The new business will combine Bank of America's leading leasing and risk
management expertise with CCB's market strength," said a statement from
Bank of America.

The new joint venture, expected to be launched in early 2008, will cover
a wide range of businesses, including finance leasing, taking fixed
deposits from shareholders, issuing financial bonds and providing
interbank loans.

It will also obtain loans from financial institutions and foreign
exchange loans from overseas and provide economic consulting services.

Bank of America currently holds a 9-percent stake in CCB as a strategic
partner. Since 2005 the two banks have launched cooperation in consumer
banking, treasury services, governance and risk management.

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Learn Mandarin online - China solves insecurity in drinking water

CHINA / National

China solves insecurity in drinking water
(Xinhua)
Updated: 2006-06-05 14:04

China has completed more than 800,000 rural drinking water projects in
recent years, solving difficulties and insecurity in this regard for 67
million rural residents, says a white paper entitled Environmental
Protection in China (1996-2005) issued on Monday.

The Chinese government has launched campaigns to build towns and
townships with a beautiful environment and ecologically advanced villages
in recent years, pushing forward comprehensive control of the rural
environment, according to the white paper released by the Information
Office of the State Council of China.

China is concentrating on the demonstration of comprehensive control of
pollution from livestock, poultry and fish breeding, and non-point
pollution in Taihu, Dianchi and Chaohu lakes, as well as in the Yangtze,
Zhujiang and Yellow river deltas, the white paper says.

Some provinces and municipalities have beefed up control of the village
environment and improved village infrastructure, and made progress in
treating rural sewage and waste and controlling agricultural non-point
pollution, according to the white paper.
The government has, as well, started the investigation of soil pollution
and demonstration of pollution control throughout the country, and set up
a system of testing and controlling the security of agricultural
products, the white paper says.

It also strengthened the environmental security control of pesticides and
chemical fertilizer, popularized high-efficiency, low-toxicity and
low-residue pesticides, and prohibited the use of high-toxic and
high-residual pesticides in the production of vegetables, fruits, grain,
tea and Chinese medicinal herbs, the white paper adds.

The government also prevented non-point pollution brought about by
irrational use of chemical fertilizer, pesticides, farm-use plastic
sheeting and wastewater irrigation, so as to ensure the security of
agricultural products, according to the white paper.

China, at the same time, encouraged the development of eco-agricultural
projects that closely integrates breeding industry with crop farming, the
white paper says.

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wooden puzzle, one-piece toilet, RC hovercraft, photo album, prom dress,
pocket bike, Vaginal Speculum, Samurai Sword, String Panty and PVC Pipe.

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Learn Chinese online - Consumer goods: 99.5%?moon cakes safe

?  ?

BIZCHINA / Biz Media Digest

Consumer goods: 99.5%?moon cakes safe

(Xinhua)
Updated: 2007-09-05 11:15

Latest quality checkups show 99.5 percent of China's moon cakes are up to
scratch, the nation's top quality watchdog said on Tuesday.

Moon cakes are special snacks Chinese people eat at the traditional
Mid-Autumn Festival on August 15 in the lunar calendar each year. The
festival falls on September 25 this year.

The General Administration of Quality Supervision, Inspection, and
Quarantine (AQSIQ) said it has checked a total 425 types of moon cakes
made by 378 firms in 29 Chinese provinces.

Those that failed safety tests were found either with excessive
microorganisms and food additives, or with problematic labeling, AQSIQ
said.

AQSIQ added it has ordered local branches to dispose the unsafe moon
cakes and their manufacturers to fix the problems in a fixed period of
time.

The top quality watchdog will continue to strengthen its clampdown on
excessive coliform and food additives in the moon cakes in the run-up to
the Mid-Autumn Festival.

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Learn Chinese online - Push to foreigners in agri wholesale

?  ?

BIZCHINA / Center

Push to foreigners in agri wholesale

By Fu Jing (China Daily)
Updated: 2007-09-04 10:00

?

A trader unloads watermelons at a wholesale market in Beijing.?Senior
commerce officials yesterday urged foreign investors to expand in China's
agricultural wholesale sector. [China Daily]?

Senior commerce officials yesterday urged foreign investors to expand in
China's agricultural wholesale sector, which is worth US$146 billion in
output annually.

Lower returns compared with the retail and supermarket sectors has made
wholesale less enticing for overseas investors. To date, the Ministry of
Commerce has received only one overseas investment application.

Assistant Minister of Commerce Huang Hai said China encourages foreign
investors in the booming wholesale sector, adding that overseas
involvement could help raise standards to an international level.

"China's wholesale market has been fully opened to foreign investors, but
it has become less attractive because of low returns," Huang told China
Daily yesterday at the 25th Congress of the World Union of Wholesale
Markets, a three-day event being held in Beijing.

He confirmed that his ministry had accepted one overseas application to
set up a wholesale market in China, but didn't name the applicant.

Donald Darnall, chairman of the US-based World Union of Wholesale
Markets, said Huang's comments were "encouraging news" for wholesalers
attending the event.

Darnall said foreign investors could form partnerships with the
government or local companies, bringing with them practices that ensure
high-level hygiene and food safety in the marketplace.

Huang said China needs international experience and best practices to
track food quality along the whole "farm-to-table" process. Its fledgling
agricultural wholesale market, which has had only 20 years to develop, is
less advanced in terms of technology and management in some cities.

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Learn Chinese online - Reining in demolition

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BIZCHINA / Review & Analysis

Reining in demolition

(China Daily)
Updated: 2007-09-01 11:14

A decision to amend the law on the management of urban real estate was
adopted at the session of the Standing Committee of the National People's
Congress that concluded on Thursday. The decision gave the State Council
the mandate to make administrative specifications on the demolition of
properties owned by institutions or individuals if the demolition is in
the public interest.

Related readings:

?Real estate law amended to back state expropriation
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??More arable land 'needed' by 2030

The Property Law, which will take effect on October 1, stipulates that
collectively-owned land or real estate properties in the possession of
institutions or individuals can be acquired for the needs of public
interest, but such acquisitions must be conducted within the limit of
related judicial stipulations and legal procedures. As a result, the
regulations on the management of urban demolition of houses enacted in
1991 will have to be nullified because the old regulations do not comply
with the new law.

As a matter of fact, urban demolition has become a sources of public
complaint and anti-corruption departments have listed urban construction
projects as one of the major areas where corruption involving government
officials is most likely to take place.

So the new administrative rules will have a bearing on how a balance can
be struck between the protection of individual property rights and the
demolition of real estate for the needs of public interest.

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Chinese Mandarin - CIRC mulls rules for pension insurance management

?  ?

BIZCHINA / Top Biz News

CIRC mulls rules for pension insurance management

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-08-29 17:40

China's insurance regulator is working at constituting special
regulations on managing the pension insurance business, the Shanghai
Securities News reported yesterday, citing an official at the China
Insurance Regulatory Commission (CIRC).

It is a move to ensure insurance companies that handle corporate
annuities are able to pay expired debts and future liabilities to avoid
risks during managing annuities, and to protect the beneficiary's
legitimate rights and interests, said Liang Tao, director of CIRC
personal insurance regulatory department.

Statistics from the Ministry of Labor and Social Security (MLSS) show
that the corporate annuity fund, which covers 9.64 million people, had 91
billion yuan in assets in 2006, but only 15.8 billion yuan, or 17
percent, was managed by professional investors.

A total of 30 financial institutions, including insurers and securities
and trust companies, are currently designated as custodians, trustees and
asset managers for corporate annuity management.

A new round of campaign for granting qualifications required for the
annuity management will be launched next month.

Liang suggested that those pension insurers and life insurance companies
which plan a move into pensions try to acquire the trustee, custodian and
asset manager licenses from MLSS together, in a bid to improve the profit
ratio and reduce costs and risks.

A recent survey shows China's enterprises annuity will add 50 billion
yuan (US$6.62 billion) annually in five to 10 years.

CIRC encourages insurance companies to develop more flexible annuity
products and annuity account services, such as fixed and alterable
annuities, transferable annuities, as well as open annuity accounts, to
stress the investment and account management functions, according to
Liang.

Meanwhile, CIRC will study and discuss the taxation policies on pensions
with relative government organs, in an effort to bulid a multi-level
pension system covering everything from enterprise annuity to group and
personal pension insurance.

CIRC will help MLSS bring enterprise annuity funds under the management
of professional managers by the end of this year according to a
previously-set target. The insurance industry needs cooperation with MLSS
to take over the enterprise annuities, based on its advantages in
accurate calculation, product design, and sales?and asset management,
said Liang.

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Chinesepod - Make polluters pay

?  ?

BIZCHINA / Review & Analysis

Make polluters pay

(China Daily)
Updated: 2007-08-27 10:40

The repeated cases of contaminated drinking water reflect the degree to
which pollution has taken its toll. It should be clear that we urgently
need harsher measures, supported by law, to address the situation.

The deliberation of the amended draft of the law on the prevention and
control of water pollution by the current session of the Standing
Committee of the National People's Congress (NPC) sends the message that
the deputies to the NPC share this concern, and that their motion to
revise the law reflects the will of the general public.

The NPC standing committee organized a special team last year to
investigate how the current law, enacted in 1984 and revised in 1996, was
implemented, and the team, after the investigation, proposed that the law
be revised.

They discovered that the maximum penalty allowed by the current law is
not severe enough to deter polluters.

The current law caps the fines for firms that cause pollution accidents
at 1 million yuan ($130,000). The fines on those firms that discharge
waste in violation of the rules but have not caused pollution accidents
are capped at only 100,000 yuan ($13,000). That is less than it costs to
operate waste treatment facilities, meaning the fines are likely to have
little effect on polluters.

As a result, quite a number of firms either do not install sewage
treatment facilities or do not use them even if they do have them, or
would rather pay a fine than treat their waste before discharging it.

In addition, environmental watchdogs, particularly those under the
auspices of local governments, have no power to decide whether a
polluting firm should be shut down or not. Even if they are absolutely
sure that a polluting firm must be shut down, they can only pass on
proposals to the relevant government.

It is hoped that the draft under discussion will remove the cap on fines,
and that environmental watchdogs be given the authority to shut down
polluters. Such changes would certainly give teeth to environmental
watchdogs and help tighten control of water pollution.

The regular water pollution monitoring and information release mechanism
required by the amended law should also bring more transparency to the
water pollution situation and how such pollution is controlled. If this
mechanism can encourage the general public to participate in the
supervision process by giving tips to watchdogs on specific cases
involving the discharge of waste into water, we will have reason to be
optimistic about water pollution control.

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Chinese language - What requirements should adopter meet?

CHINA / Do You Know

What requirements should adopter meet?
(Gov.cn)
Updated: 2006-05-30 16:13

1.In accordance with the provisions set forth in the Adoption Law of the
People's Republic of China, the adopters should meet simultaneously the
following requirements:

(1)Childless.

"By childless" is meant to indicate that the adopters have neither
biological children, nor any adopted children, nor step-children.

(2)The capacity of rearing and educating the adoptees.

"By the capacity of rearing and educating the adoptees" is meant to
indicate that the adopters should have the full civil capacity, and the
capacity of rearing and educating the adoptees physically,
intellectually, resourcefully and morally as well as the capacity of
fulfilling parental obligations to their children.

(3)No such diseases as considered medically unfit for adoption.

��No such diseases as considered medically unfit for adoption�� is
defined as mainly mental disease and infectious disease.

(4)30 years old.

"By 30 years old" is meant to indicate one's 30 full years of age. When a
couple jointly adopts a child, both of them should reach the age of 30.

2.Where a person with spouse adopts a child, the husband or wife should
get consent from the other to adopt the child in concert.

3.Where a spouseless male adopts a female child, the full years of age
between the adopter and the adoptee should be over 40 years.

4.The adoption of a child belonging to a collateral relative by blood of
the same generation and up to the third degree of kinship, may not be
confined to the restrictions that ��children whose parents are unable to
rear them due to unusual difficulties, the ��age difference between the
adopter and the adoptee shall be no less than 40 years�� and that the
adoptee is under the age of l4.

"By the adoption of a child belonging to a collateral relative by blood
of the same generation and up to the third degree of kinship" is meant to
indicate siblings and brothers-sisters-german of the third degree of
kinship; ��the children belonging to a collateral relatives by blood of
the same generation and up to the third degree of kinship�� indicate the
children of the siblings and that of brothers-sisters-german of the third
kinship, namely, nephews and nieces, and brothers-sisters-german and
cousins-german of the fourth generation.

5.Orphans, disabled children or abandoned infants and children, who are
raised in the social welfare institutes, and whose biological parents can
not be ascertained or found, may be adopted irrespective of the
restrictions that the adopter should be childless and adopt one child
only.

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Learn Mandarin online - Stock index leaps over 5,000 mark

?  ?

BIZCHINA / Photo

Stock index leaps over 5,000 mark

By Jin Jing (China Daily)
Updated: 2007-08-24 09:03

An investor seems pleased at a brokerage in Nanjing, Jiangsu Province,
after the country's main stock index crossed the 5000 barrier for the
first time yesterday.?[newsphoto]?

The Shanghai stock market jumped 1.05 percent to close at 5032.49
yesterday, breaching the 5,000-point psychological barrier for the first
time.

The Shanghai Composite Index rose 52.41 points, with 524 out of 901
stocks closing higher. Turnover amounted to 153.37 billion yuan ($20.1
billion).

The index has surged a total of 88 percent this year.

The Shenzhen Composite Index rose 1.2 percent to close at 1415.18, and
the foreign-currency denominated B-share index climbed 0.69 percent to
close at 316.46.

According to Orient Securities, non-ferrous metal stocks surged the most
from June, followed by real estate, and mining and quarrying stocks.

Analysts said plentiful liquidity, strong corporate earnings and positive
investor sentiment combined to drive the stock market to a new high.

"Asset revaluation is just beginning, and will continue in the second
half of this year, which is expected to push the market even higher,"
said Zhu Haibin, an analyst at Essence Securities.

"The booming market is sure to continue to absorb big amounts of capital
from family savings," said a report from Orient Securities yesterday.

The percentage of investment assets owned by each household in China is
much lower than in developed countries. Equity investment accounts for
only 9 percent of a family's total assets in China, compared with 22.7
percent in the US and 20 percent in Japan, according to the report.

However, liquidity is expected to reduce in the second half, analysts
said.

"Demand for capital is expected to increase sharply in the next few
months because of the expected large amounts of the IPOs, new-share
offering and corporate bonds," said the report.

"The government may also adopt some administrative measures to control
bank lending, which may trigger a market correction," said Zhu.

"We will invest in low P/E ratio stocks, and companies that directly
benefit from economic growth and currency appreciation in the near
future," said Lin Wenjun, chief analyst at Fullgoal Fund Management Co
Ltd.

?

(For more biz stories, please visit Industry Updates)

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Learn Chinese - Interest rates raised again

?  ?

BIZCHINA / Center

Interest rates raised again

By Dong Zhixin (chinadaily.com.cn)
Updated: 2007-08-21 20:25

?
The headquarters of the People's Bank of China in Beijing is seen in this
photo taken in May 2007. [newsphoto]

China's central bank raised the benchmark interest rates on Tuesday for
the fourth time this year in an effort to prevent the economy from
overheating and curb accelerating inflation.

The one-year deposit rate will increase 27 basis points to 3.60 percent,
while one-year lending rate will rise by 18 basis points to 7.02 percent,
effective on Wednesday, the People's Bank of China said in a statement on
its website.

The increase is aimed at better steering bank credit and stabilizing
inflation expectation, according to the statement.

The timing is somewhat of a surprise as the central bank usually
announces interest rate changes during the weekend in the past. However,
the latest hike is not totally unexpected given mounting concerns about
overheating economy and accelerating inflation.

China's gross domestic product grew 11.9 percent in the second quarter
this year, the fastest recorded in a decade.

In July, the trade surplus rose 67 percent from a year earlier to $24.4
billion, the second-highest monthly total, and the money supply climbed
18.5 percent, the biggest increase in more than a year.

Fixed-asset investment in urban areas increased 26.6 percent in the first
seven months from a year earlier, close to the 26.7 expansion in the
first half.

The Consumer Price Index, a barometer of inflation, jumped by a
10-year-high 5.6 percent in July, well above the official target of three
percent.

The inflation rate is also higher than the deposit rate, indicating a
loss of purchasing power if people put their money into banks.

The low interest rate policy has somewhat encouraged an exodus of bank
savings to the country's skyrocketing stock market, which has soared more
than 80 percent so far this year on top of a 130 percent rally in 2006.

The benchmark Shanghai Composite Index jumped more than 5 percent on
Monday, followed by a one percent increase on Tuesday, edging closer to
the historical new high of 5,000 points.

Tuesday marked the fourth interest rate hike so far this year. The
central bank raised the rates on July 20 when the benchmark one-year
deposit rate rose to 3.33 percent. That rate hike is coupled with a
reduction of interest income tax on bank deposits to 5 percent from 20
percent.

Besides interest rate hikes, the central bank has ordered banks to set
aside more money as reserves for six times so far this year.

(For more biz stories, please visit Industry Updates)

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Chinese Mandarin - Family fabric

?  ?

BIZCHINA / Biz Who

Family fabric

By Liu?Weiling and Diao Ying (China Daily)
Updated: 2007-08-20 06:51

But the most important lesson that he learned there was competition,
which he later instilled in his own management. Most enterprises in the
1980s were State-owned and inefficient. Workers were comfortable with
their "iron bowl" - a job for life under the planned economy - and never
worried about unemployment. But Zhou as a student was impressed that an
old friend from his hometown was fired for poor performance in Shenzhen.

Today in Hongdou, he sets up sales teams from two apparel factories with
the same product and has them compete within the enterprise.

"It is difficult to raise a single child," he explains. Some might think
the strategy increases costs, but Zhou notes "we need competition within
the enterprise to face with the fierce competition on the outside".

Party school

Zhou's grandfather started a cotton-processing operation in 1957,
employing three workers in a rented space. Later the small factory was
asked to merge with two others into a collective operation.

It was during the days when China was stricken with poverty and natural
disasters, and business was tough for the enterprise. His grandfather
died in 1964 after years of inhaling cotton dust.

In 1983, shortly after the reform and opening up began that would later
spread throughout China, Zhou's father, Zhou Yaoting, a local Party
secretary, took over the company, which Zhou joined in 1987. Zhou helped
his father privatize the company through a management buyout.

In 1992 the family and 50 others gained over half ownership in the
company. Later the family strengthened its hold, and the government sold
its last shares in 2004.

Education has been important in building Zhou's career and networks. In
1994, he was sent by his father to the Party school to study with
officials from various provinces. Zhou, a Party member himself, was
impressed with his classmates and admitted that he learned a lot from
them.

"They are very hard working and very moderate," Zhou says, "although
moderation sometimes does not fit into my business strategy."

But today the Party committee remains an important organization in his
company. "The committee doesn't interfere with the operation, but it is
the political core of the group," he says.

Zhou furthered his studies in the United States in 1997, where he had the
chance to visit multinational corporations such as Wal-Mart. There he
learned the importance of giving everyone equal opportunity and access to
information.

At Hongdou, he now asks a fresh graduate student selected through
elections to hold an important position in his factory. He has also set
out a mailbox to encourage workers in the factory to send their opinions
directly to him.

While China is still seen as the manufacturing base for most overseas
enterprises, Zhou's textile-dominated company has gradually moved up the
value chain. Outside the factory in his hometown in East China's Jiangsu
Province and in neighboring Zhejiang Province, he has outsourced
manufacturing jobs to over 40,000 workers.

The main market of the company's major brand, Hongdou, is now in
second-tier cities, but still has a low profile in the rising large urban
centers. Zhou invests money in design and employs designers from Paris to
give his products a new look.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - China to issue US$3.68b 20-year T-bond

?  ?

BIZCHINA / News

China to issue US$3.68b 20-year T-bond

(Xinhua)
Updated: 2007-08-16 13:05

China will begin to issue 28 billion yuan (US$3.68 billion) worth of
book-entry treasury bonds on Thursday, the 13th batch of its kind issued
this year.

The 20-year T-bonds carry an annual interest rate of 4.52 percent, the
Ministry of Finance said in a statement on Wednesday.

The bonds will be sold via the national inter-bank bond market, the stock
market and commercial banks from August 16 to 21, and will be available
for trading on the stock market and over the counter at designated
commercial banks from August 24.

Related readings:
?China to issue 6-month T-bond with annual yield of 2.77%
?Shanghai Stock Exchange names bond market makers
?Special bond won't affect liquidity - paper

Special Coverage:
Markets Watch ?

With a fixed interest rate, the interest will be paid every half year.

The ministry said the T-bonds were available to investors with accounts
for investments in funds, shares and bonds at China Securities Depository
and Clearing Co., China Treasury Bonds Depository and Clearing Co. or
designated commercial banks.

China issued book-entry treasury bonds totaling 652.72 billion yuan last
year, 150 billion yuan more than in 2005.

The government pledged earlier this year to cut the issuance of treasury
bonds in 2007 by a "modest" amount, in a bid to reduce its financial
deficit and expand channels for direct financing.

(For more biz stories, please visit Industry Updates)

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Learn Chinese - FDI up 13% in 7 months

?  ?

BIZCHINA / Photo

FDI up 13% in 7 months

By Jiang Wei (China Daily)
Updated: 2007-08-14 09:14

?

A group of foreign businesspeople at the China International Fair for
Investment and Trade in Xiamen, East China's Fujian Province. [File Photo]

China's realized foreign direct investment (FDI) increased nearly 13
percent year-on-year from January to July, driven by rapid growth in the
real estate, stock and forex markets.

The country received $36.93 billion in FDI in the first seven months of
this year, up 12.92 percent from a year earlier, the Ministry of Commerce
said yesterday. It approved 21,676 foreign enterprises in this period,
down 4.81 percent from last year.

Related readings:
?June FDI rises 21.91% to $6.63b
?Central bank vows to prevent overheating
?China tightens rules on foreign property investors
?More foreign capital flows in property sector

Foreign investors are expected to set up more operations in China this
year, in particular in the second half, to avail the last opportunity to
enjoy favorable corporate income taxes, said Lu Jinyong, a researcher at
the University of International Business and Economics.

From next year, income tax rates for domestic and foreign companies will
be unified at 25 percent. Domestic companies currently pay 33 percent
income tax while foreign companies, which have tax waivers and
incentives, pay an average of 15 percent.

Foreign enterprises registered before the rate unification will be taxed
at the favorable rates for another five years.

The figures released by the ministry do not include investments in the
financial sector, such as banking, insurance and securities. The ministry
also did not give the amount for contracted FDI agreements yet to be
fulfilled, as opposed to the ones realized.

Lu expects FDI in China's non-financial sectors to exceed $70 billion
this year, compared with $63 billion last year.

(For more biz stories, please visit Industry Updates)

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Learn Mandarin online - CNPC, Chevron to develop Sichuan gas field

?  ?

BIZCHINA / Center

CNPC, Chevron to develop Sichuan gas field

(Xinhua)
Updated: 2007-08-13 09:19

The US-based oil giant Chevron has won a bid last weekend to cooperate
with China's largest oil producer in developing natural gas in southwest
China's Sichuan Province, business insiders said.

The cooperation would cover the Luojiazhai gas field that has a high
sulfur content, ranging from 7.13 percent to 10.49 percent.

The operator of the gas field - China National Petroleum Corporation
(CNPC) was said to have begun last year to seek foreign partners in
developing the field, which boasts a gas reserve of 58.11 billion cubic
meters.

Related readings:
?CNPC bought overseas exploration rights
?New gas reserves discovered in Sichuan
?CNPC invests US$5.2b in Nanpu
?CNPC signs US$1.5b gas contract with Turkmenistan
?New oilfield found in Bohai Bay
?CNPC, Ministry of Railways under audit scrutiny

CNPC, also the parent company of the New York- and Hong Kong-listed
PetroChina, expanded the area covered by the cooperation to four blocks
in total this year, and the move would make it more attractive to foreign
partners as some insiders said.

The US company has won the bid over rivals such as France's Total SA, the
Royal Dutch Shell and the Statoil ASA of Norway, insiders said.

The two companies would have to sign a contract to fix how to split the
total output from gas fields under their cooperation, they said.

CNPC has made no official announcement on the news yet.

Luojiazhai would be the third natural gas development project for the
CNPC with foreign partners.

The company signed a deal with Total last year to explore the Sulige gas
field in the Erdos Basin of Inner Mongolia.

CNPC is also jointly developing the Changbei gas field in the same region
with Shell, and the two sides announced in March they had started
commercial production in the field.

(For more biz stories, please visit Industry Updates)

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Chinese Mandarin - SCO photo session at Shanghai summit

?  ?

CHINA / Photo

SCO photo session at Shanghai summit

(newsphoto)
Updated: 2006-06-16 08:39

Chinese President Hu Jintao (C) waves as he poses with other leaders
during a group photo session at a summit of the Shanghai Cooperation
Organization (SCO) in Shanghai June 15, 2006. The leaders are (from L-R)
Mongolian President Nambaryn Enkhbayar, Uzbekistan's President Islom
Karimov, Russia's President Vladimir Putin, Kazakhstan's President
Nursultan Nazarbayev, Chinese President Hu Jintao, Kyrgyzstan's President
Kurmanbek Bakiyev, Tajikistan's President Imomali Rakhmonov, Iran's
President Mahmoud Ahmadinejad, Pakistan's President Pervez Musharraf and
Afghanistan's President Hamid Karzai. [newsphoto]

Top China News ?

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Today's Top News ?

* Vehicles ordered off road for Olympics drill
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* China invites the world to 2008 Olympic gala party

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Learn Chinese - Stocks ladder up despite probable tightening

?  ?

BIZCHINA / News

Stocks ladder up despite probable tightening

By Li Zengxin (www.chinadaily.com.cn)
Updated: 2007-08-09 12:03

Chinese stocks shrugged off tightening warnings by the central bank this
morning, with the Shanghai Composite Index rising 1.33 percent to
4,725.18.

The majority of Chinese stocks resumed strong growth pending the July
consumer price index (CPI), which is estimated to reach a record 5
percent growth rate by a few investment banks, including Goldman Sachs,
Credit Suisse and Shenyin Wanguo Securities. Yesterday's sluggish
performance was pushed up by a single heavyweight blue chip.

The benchmark Shanghai Composite Index opened lower from 4,658.59 but
surged in waves to a high of 4,726.44, leaving the opening point as its
lowest level this morning. After touching the high point, it quickly
retreated before climbing again to finish 62.02 points higher than
yesterday's close at the noon break.

The Shenzhen Component Index, tracking the smaller Shenzhen Stock
Exchange, mapped out a similar pattern. It opened higher from 16,194.04
and closed at 16,373.97, 180.25 points or 1.11 percent higher than the
previous closing. The index went through the morning session between its
opening point up to 16,450.22.

Of the A shares listed on the two exchanges, as many as 844 went up this
morning, while 462 closed down and 156 ended unchanged. Stocks in the
paper making, metal, retail and wholesale businesses were on top of the
surge.

The Industrial and Commercial Bank of China, the largest trader in
Shanghai, failed to copy yesterday's index-lifting 9 percent rise, but
added up 0.03 yuan or 0.47 percent to its share price. The largest trader
in Shenzhen, China Vanke, grew 1.47 percent this morning.

The central bank admitted on Wednesday that the country is coming under
increasing pressure from price hikes, and acknowledged inflation risks
are "worthy of attention".

The People's Bank of China said in its second-quarter monetary report
published on Wednesday that the current rising prices were not solely
caused by accidental and temporary factors, adding that inflation risks
were on the rise. It warned that the rising food prices could spread to
other consumer products.

A survey by the central bank in the second quarter showed that 40.2
percent of those interviewed, the second highest recorded since 1999,
said they were worried about inflation.

China's?CPI rose 3.2 percent in the first half of this year, and the
growth rate was 1.9 percentage points higher than the year-earlier level.
The June CPI growth reached 4.4 percent, the highest in 33 months.

(For more biz stories, please visit Industry Updates)

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Chinese language - Long-term RMB reform benefits China and US

?  ?

BIZCHINA / Weekly Roundup

Long-term RMB reform benefits China and US

By He Fan (China Daily)
Updated: 2007-08-07 17:40

The author He Fan is a researcher with the Institute of World Economics
and Politics at the China Academy of Social Sciences

The reform to China's exchange regime is being carried out in a
market-orientated means toward a long-term target. Turing it into a
political issue would only harm the process or even tarnish the ultimate
target itself.

China's exchange regime is one of the major topics in the Strategic
Economic Dialogue between China and the United States, which began in
September 2006. The talks are only one indication of the US government's
concern over China's exchange rate.

Before commenting on America's over-concern, it is necessary to examine
the gains and losses of the US on the renminbi exchange rate issue.

Special coverage:
RMB Revaluation
Related readings:
?China 'won't bow' to yuan pressure
?Yuan steady despite pressure
?Survey: RMB revaluation manageable for exporters
?Economists warn of risks of continued yuan appreciation

Will the United States reap great benefit from a significant renminbi
appreciation? Certainly not.

China will see reduced exports as a consequence of renminbi appreciation,
but the US will not stop buying the necessities it requires. US importers
may turn to other developing countries. But if the commodities from those
countries are more expensive than Chinese goods, the switch does not
improve the US's international balance by reducing its trade deficit.

If China loses its share of the international market for the yuan
appreciation, its economic growth will be slowed, cutting down its
imports from the US. It will not help reduce the US trade deficit, either.

Commodity trade aside, the renminbi's appreciation will also hurt the US
in capital account items. US direct investment will become less rewarding
after the yuan gains against the US dollar, decreasing US profit from
international investment.

As a matter of fact, the US has more to gain if China maintains the
renminbi at a stable level.

When the US manufacturers shift their factories into China for the
relatively lower costs here, US customers still enjoy the products by
importing them from China. The consumption of resources, energy and the
pollution to the environment during the manufacturing process are all
left in China.

When the yuan is stable, the US has a more important advantage.

Thanks to the trade surplus, China has accumulated a large sum of US
dollars and its world largest foreign exchange reserve is mostly in US
dollars. Such a big sum, a considerable portion of which is in the form
of US treasury bonds, contributes a great deal to maintaining the
position of the US dollar as an international currency.

Russia, Switzerland and several other countries have restructured their
foreign exchange reserve and reduced the US dollars they hold. China is
unlikely to follow suit as long as yuan's exchange rate is stable against
the US dollar.

The Chinese central bank will be forced to sell US dollars once the
renminbi appreciates dramatically, which might lead to a mass
depreciation of the US dollar against other currencies.

The Chinese government launched an exchange reform regime years ago. The
renminbi will be appreciated gradually, the exchange regime would evolve
in a managed floating exchange rate system and an effective foreign
currency market would be established.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - SME board companies can disclose information at noon

?  ?

BIZCHINA / News

SME board companies can disclose information at noon

Updated: 2007-08-06 15:49

Companies listed on the small and medium-sized enterprises (SME) board of
the Shenzhen Stock Exchange can release their corporate information at
noon, according to a regulation of the bourse effective today.

Related readings:
?Shanghai bourse revises bonds trade rules
?Bourse urges contract openness
?Bourse orders disclosure meetings
Special Coverage:
Markets Watch ?

Previously, SME board companies were only allowed to disclose corporate
information after the close of a day's trading.

The new regulation, released by the exchange last month, permits SME
board members to release temporary announcements on authorized websites
from 11:30 to 13:00 or after 15:30.

If an SME company makes temporary announcement at the noon, the Shenzhen
bourse will add a letter "A" to the initials of the corporate name, which
investors see using their trading software. In the initial stage, the
exchange will also post the list of companies that have released
temporary announcements at noon on particular websites.

"The new information disclosure system will greatly save time in
publicizing important issues, which may help reduce insider trading and
increase market transparency," the Beijing News quoted Zhang Hui, an
analyst with Xinye Securities, as saying.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� Shanghai bourse revises bonds trade rules
===========================================================================
� Bourse urges contract openness
===========================================================================
� Bourse orders disclosure meetings
===========================================================================

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Chinese School - Most vegetables safe: Official

?  ?

BIZCHINA / Center

Most vegetables safe: Official

By Wu Yong (China Daily)
Updated: 2007-08-03 09:54

The vegetables grown in China are fine and there's nothing to worry about
their quality, a senior official of the country's leading vegetable
testing center said yesterday.

"The compliance rate of vegetables to the national standards has improved
greatly," said Liu Su, deputy director of the supervision and testing
center for vegetables' quality of the Ministry of Agriculture (MOA).

?
?

People buy vegetables at a Beijing market yesterday. Most of the
vegetables grown in China are absolutely safe, quality officials say.
[newsphoto]

The center's tests for chemical residues show that the rate of compliance
of vegetables rose from 82 percent in 2003 to 93 percent last year. In
fact, the compliance rate reached 93.6 percent in April this year.

The center sets the regular monitoring standards for 37 provincial
capitals and cities. It tests 60 to 70 varieties of the most popular
vegetables, including pepper, cucumber and tomatoes, and has stored more
than 1.2 million data since 2003.

The quality of vegetables has improved over the past couple of years,
said Lin Huan, chief of the center's laboratory and in charge for
pesticide residue tests.

"The quality and safety of agricultural products is at the heart of food
safety. The MOA has quality supervision and regulation high on its
agenda," said Zhang Yuxiang, director of MOA's marketing and information
department.

The food safety watchdog has taken action both to check the misuse of
banned pesticide and to set up a surveillance system.

An MOA source said the agricultural safety watchdog seized 4.9 million
tons of banned pesticide across the country in the first half of this
year.

Also, the MOA is mulling setting up a tracking system for food products
to ensure utmost food safety.

"The tracking system is very important because it can monitor every step
in the food production process," said Professor Cai Tongyi, who is a
consultant to Beijing Olympic Food Safety Consulting Committee.

"The vegetables to be supplied for next year's Beijing Olympic Games will
be absolutely safe," Liu said.

(For more biz stories, please visit Industry Updates)

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Chinesepod - Real estate investment surges 28.5% in 1st half

?  ?

BIZCHINA / Center

Real estate investment surges 28.5% in 1st half

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-08-01 17:41

A total of 988.7 billion yuan (US$130.7 billion) was poured to the real
estate market in the first half this year, up 28.5 percent from the same
period of last year, according to statistics from the National
Development and Reform Commission.

Of the total investment, some 695.5 billion yuan was injected into the
commercial house market, rising 30.8 percent year-on-year and 2.6
percentage points higher than the growth rate of the first half last year.

Special coverage:
Housing in China
Related readings:
?Central bank to tighten real estate credit
?Money flows from stocks to property
?Property prices up 7.1% in major cities
?More curbs possible for real estate

Meanwhile, investment in economically affordable housing was 29.2 billion
yuan, 4.2 percent of the total housing investment, a 34.4 percent
increase year-on-year, and 7.2 percentage points lower than the growth
rate in the first quarter this year.

By the end of June, there were 124 million square meters of available
commercial building space, up 2.3 percent from a year ago. Therein, 65.63
million square meters were commercial houses, a 2.3 percent decline
compared with the same period of last year.

In the first six months this year, overseas investment utilized by
domestic real estate developers and in personal mortgage loans also
surged rapidly.

A total of 1.56 trillion yuan was ready for real estate investment, up
27.8 percent year-on-year. Of that, domestic loans amounted to 345.5
billion yuan and 28.2 billion yuan was from overseas, up 25.9 percent and
68.7 percent year-on-year respectively.

At the same time, some 530.1 billion yuan was financed by developers
themselves, a 28.4 percent rise year-on-year. The remaining 658 billion
yuan was procured in other ways, including through personal mortgage
loans, which grew 56.6 percent to a total 170.2 billion yuan.

From January to June, a total 279 million square meters of commercial
building areas were sold, an increase of 21.5 percent year-on-year, 8.7
percentage points higher than the first quarter.

In terms of building functions, some 254 million square meters were
commercial houses, another 5.44 million square meters were office
buildings, and the remaining 16.56 million square meters were for
multiple business purposes, up 22.5 percent, 21.6 percent, and 5.8
percent respectively.

Meanwhile, there were 1.71 billion square meters buildings under
construction, surging 21.9 percent from a year earlier. Some 1.34 billion
square meters were for residential houses, up 22.9 percent year-on-year,
and 449 million square meters were newly opened projects, up 18.4 percent.

Of the total newly opened projects, 375 million square meters were for
residential houses, up 20.9 percent. Meanwhile, newly completed buildings
totaled 149 million square meters of buildings, an 11.1 percent increase
year-on-year, and 1.7 percentage points higher than the first quarter.

(For more biz stories, please visit Industry Updates)

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Learn Chinese online - Steel export growth to slow down

?  ?

BIZCHINA / Top Biz News

Steel export growth to slow down

By Gong Zhengzheng (China Daily)
Updated: 2007-07-31 09:15

Growth of steel exports from China, the world's top steel producer, will
slow to 20 percent for the full year due to government efforts to curb
breakneck growth in the first half of the year, according to an industry
body.

Overseas shipment of finished steel products will hit 51.6 million tons
in 2007, up from 43 million tons last year, Luo Bingsheng, vice-chairman
of China Iron & Steel Association, said in Beijing.

The forecast growth rate would be the slowest since 2003, according to
steel association data.

From January to June this year, steel products exports surged 97.7
percent year-on-year to 33.8 million tons.

However, Zhou Xizeng, a steel analyst with CITIC Securities Co in
Beijing, said the pace of exports will not slow as much as Luo's estimate
because demand and price in the international market remain strong.

Zhou said steel products exports will grow by 30 percent this year from
2006.

Related readings:
?Steel export growth to slow down
?Gov't to maintain restraints on steel exports
?China hits high in steel output ?A state curb just the ticket for steel

China has adopted measures since last year to control steel exports as
part of its drive to tame the trade surplus and prevent trade conflicts
with other countries. In the first six months of this year, the nation's
trade surplus jumped 84 percent to $112.5 billion.

On July 1 China slashed export tax rebates for more than 160 steel
products to 0 or 5 percent from 11-13 percent.

"As a result, steel products exports in the second half will be much less
than in the first half," Luo said.

He said July-December exports will plunge by 40 to 50 percent from those
in the first six months.

"But the policy doesn't mean the less steel exports the better. We should
keep it at a proper level," Luo stressed.

He said exports should account for one-tenth of China's steel production.

(For more biz stories, please visit Industry Updates)

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Chinese language - Finance: Household wealth boom calls for private banking

?  ?

BIZCHINA / Biz Media Digest

Finance: Household wealth boom calls for private banking

(Xinhua)
Updated: 2007-07-26 16:41

Both domestic and foreign banks are grappling for a bigger share of the
fledgling private banking business in China, as the accumulating wealth
of Chinese households seems to promise alluring profits for the novice
financial service.

The aggregate household wealth in China almost doubled in five years to
hit US$1.44 trillion in 2004, up from US$890 billion in 1999, according
to a Boston Consulting Group (BCG) survey.

Meanwhile, the liquid assets of Chinese wealthy families are estimated to
reach US$1.6 trillion by 2009, doubling the number for 2004.

The rapidly-growing household wealth in China forms sharp contrast
against the slow development of the wealth management services.

Many Chinese simply hold the notes in their hands, shunning investment.
The BCG survey found that the wealthy Chinese kept 71 percent of their
property in cash, while the world average is only 34.6 percent.

"The private banking business in China is still at primary stage. Almost
every bank is taking its first step in 2007." said Mao Feng, the managing
director of the private clients and asset management department of
Deutsche Bank.

Bank of China recently opened its first private banking department in
Beijing and Shanghai in March this year, to provide individual services
for clients with liquid financial assets above one million US dollars.

It had pledged to provide services of international standards by joining
hands with the Royal Bank of Scotland (RBS).

More domestic banks are hurrying to step up their private banking
services for top-class clients.

Citibank, Standard Chartered, Hong Kong and Shanghai Banking Corporation
(HSBC) have opened offices for private banking business in China to
ensure their share for the most lucrative banking service, which makes on
average ten times the profits of the retailing business in the European
and American markets.

The private banking market in China is growing at an annual rate of 12
percent, says a report from the Bank of China.

Private enterprise owners and management personnel of middle and high
levels would each account for 35 percent of the target clients for the
private banking service, and others may include professionals such as
lawyers, senior economists, IT engineers, said Lian Ping, the chief
economist with the Bank of Communications.

Lian said the domestic banks should improve client segmentation to
provide more client-oriented services in order to compete with the more
experienced foreign banks.

Talents with professional training is badly needed to provide advice and
service specifically tailored to clients, Lian added.

Domestic banks need the support of strong investment banks when it
develop its private banking business in China, said Zhou Wei, manager of
the wealth management department of the Industrial and Commercial Bank of
China.

"It would take a long time for foreign banks to provide good private
banking service for Chinese customers, as we could not succeed without
the strong support from investment banks and a powerful consulting
group," said Claude Haberer, CEO of BNP Paribas Private Bank in North
Asia.

Experts also urged related departments to establish a risk supervision
system to help ward off various risks involved in the private banking
business, and called for the setting up of a multi-level financial market
with a comprehensive and balanced portfolio for better development of the
service in China.

(For more biz stories, please visit Industry Updates)

Chinese language

Learn Chinese - 100 economists appraise China economy

?  ?

BIZCHINA / Center

100 economists appraise China economy

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-07-25 11:05

After the Chinese macro-economic statistics unveiled last week, a survey
published by Caijing Magazine (or Finance Magazine) this Monday covered
100 representative economists' judgments and predictions regarding the
Chinese economy and its development.

The survey was jointly conducted by the Caijing Magazine and China
Economic Monitoring and Analysis Center under the National Bureau of
Statistics.

The survey suggested that the comprehensive economist confidence index
was at 5.73, its highest since the first quarter of 2005, and that the
index had remained stable and relatively high for a year.

Because the consumer price index (CPI), a major gauge of inflation, went
up to 4.4 percent in June alone and totaled 3.2 percent in the first
half. Nearly 90 percent of the economists believed the CPI would grow
more than 3.0 percent in 2007, the original target set forth by the
government. However, most of the economists reserved their opinions ahead
of expected measures on controlling the booming CPI.

Some 84 percent of the scholars, 21 percent more than in the first
quarter, proposed further hikes in interest rates, and 82 percent
advocated raising the required reserve ratio for banks.

At the same time, over 50 percent of the economists predicted that the
international crude oil price will remain high and the renminbi exchange
rate will continue to grow at a rate below three percent.

Related readings:
?Economy grows at blistering pace
?GDP grows 11.5% in first half
?Central bank raises interest rates, cuts interest income tax
?Food price spike pushes CPI to pass 4% in June
?Regulator to bring credit growth under 15% for 2007
?Economic concerns growing among entrepreneurs, bankers

The economists also shared common ground in terms of the bullish real
estate and stock markets. Some 97 percent of them forecasted an average
of 5 to 10 percent rise in housing prices, and 83 percent expected
healthy growth in the securities exchanges. Nonetheless, 17 percent of
the economic experts, 8 percent more than in the first quarter, predicted
a drop in the stock market.

Following the announcement of economic statistics for the first half
year, the central bank slightly raised interest rates and the State
Council reduced the interest tax to 5 percent from 20 percent. Contrary
to anticipations of a slipping stock market, the benchmark Shanghai
Composite Index saw an increase of 145 points with a 3.73 percent gain
last Friday, suggesting the market had digested the policy effect and
there is no risk of a malignant overheated economy. That belief is held
by Gong Fangxiong, director of the China research department at JP Morgan
and shared by China International Capital Co Ltd.

However, Song Guoqing, a professor from Peking University's China Economy
Research Center, and Liang Hong, chief economist of Goldman Sachs
(China), insisted that the overflowing liquidity could result in
excessive inflation pressures.

Song said the industry added value witnessed a monthly 3.3 percent rise
in June, with an annualized rate of 47.6 percent, which is absolutely
unsustainable. Thus in the absence of appropriate measures, the annual
inflation rate may end at about 4 percent this year, Song said.

(For more biz stories, please visit Industry Updates)

Learn Chinese

Chinese Online Class - Hong Kong shares close at record high led by China-related firms

?  ?

BIZCHINA / News

Hong Kong shares close at record high led by China-related firms

(Xinhua)
Updated: 2007-07-24 09:15

The benchmark Hang Seng Index closed at a second consecutive record high
on Monday, buoyed mainly by China-related firms following sharp gains in
the Chinese mainland's stock market.

.66 points, or 0.32 percent up at a new record high of 23,291.90, after
trading between 23,152.54 and 23,389.94 during the session. The turnover
totaled 84.64 billion HK dollars, up from 83.45 billion HK dollars last
Friday.

Analysts said the Hong Kong stock market will likely continue to rise in
the near term on ample liquidity and expectations of strong corporate
earnings growth.

"In today's session, profit-taking in the early morning quickly gave way
to rotational buying from investors," said Ben Kwong, chief operating
officer of KGI Asia Ltd.

"The Hong Kong market will maintain its upward trend in the near term as
liquidity remains very strong, with the Hang Seng Index likely facing
resistance at 23,500 level," he said.

China's central bank raised key lending and deposit rates 27 basis points
after the government said a day earlier the country's economy grew faster
than expected in the second quarter and inflation was on the rise.

"The latest measures led investors to believe the Chinese government may
not take any further steps in the short term to cool the country's
economy," said Kitty Chan, director of Celestial Asia Securities Ltd.

Three of the four major categories gained ground. The Properties, the
largest gainer, went up 266.04 points or 0.94 percent to 27,661.88. The
Finance rose 96.38 points, or 0.27 percent to 35,689.18. The Commerce and
Industry moved up 33.24 points or 0.25 percent to 13,234.94. The
Utilities moved down 45.65 points, or 0.12 percent to 36,726.80.

The Hang Seng China Enterprises Index broke a new high of 13,352.62 and
gained 168.17 points to 13,320.42.

On Chinese insurance stocks side, PICC P&C set the new high since listing
of 8.1 HK dollars and surged 13.58 percent to 8.03 HK dollars, benefiting
from a 26.56 percent rise of premium income in the first half of year.
China Life and Ping An rose 1.13 percent and 1.04 percent respectively.

On Chinese telecom stocks side, China Mobile was up 0.38 percent, China
Unicom down 0.84 percent, Netcom up 0.24 percent, and China Telecom flat.

On the six banks front, Bank of China, Bankcomm and CM Bank climbed 0.175
percent to 1.36 percent. ICBC lifted 2.24 percent after Merrill Lynch
raised its target price to 5.9 HK dollars. CCB got up steam in the
afternoon, broke the new high since listing of 6.08 HK dollars and
climbed 0.84 percent to 6.04 HK dollars. CITIC Bank added 1.67 percent.

HSBC was marginally down 0.34 percent. Hang Seng Bank went up 0.44
percent.

On resource stocks side, PetroChina and Sinopec Corp edged up 0.49
percent and 0.72 percent respectively. Coal stocks China Shenhua, China
Coal and Yanzhou Coal climbed 0.62 percent to 1.89 percent. Jiangxi
Copper added 2.39 percent, led by an increase in commodity price.

(For more biz stories, please visit Industry Updates)

Chinese Online Class

Learn Chinese - Property investment up 28.5% in 1st half

?  ?

BIZCHINA / Center

Property investment up 28.5% in 1st half

(Xinhua)
Updated: 2007-07-20 16:25

China's real estate investment soared 28.5 percent from a year earlier to
988.7 billion yuan (US$130.6 billion) in the first half of 2007, the
National Bureau of Statistics (NBS) announced on Friday.

The growth was 1.6 percentage points higher than the first quarter and
4.3 percentage points higher than the same period last year, according to
the NBS.

Analysts contributed the rising investment to booming housing demand,
excessive liquidity and robust housing price hikes.

"The land resources authority has accelerated land supply growth in the
first half of the year in hope that surging house prices could be reined
in, which inevitably led to an investment hike in the real estate
sector," said Qin Hongyu, analyst with BNP Prime Peregimne.

Amid investment by real estate developers, domestic bank loans rose by
25.9 percent year-on-year, enterprises' self-raised funds increased by
28.4 percent and foreign funds soared 68.7 percent.

The NBS announced on Friday that the real estate climate indices reached
103.63 points, 0.31 point higher than May and 0.7 point higher than the
same period last year.

The total area of "developed" land in China rose 7.6 percent to 118
million square meters in the first half.

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Learn Chinese

Chinese School - GDP grows 11.5% in first half

?  ?

BIZCHINA / Center

GDP grows 11.5% in first half

(Xinhua)
Updated: 2007-07-19 14:02

China's gross domestic product (GDP) rose 11.5 percent in the first half
of the year, after it grew 11.9 percent in the second quarter, official
figures revealed on Thursday.

The growth rate for the first half is 0.5 percentage points higher than
the same period last year and much faster than the planned eight percent,
spokesman Li Xiaochao with the National Bureau of Statistics told a press
conference.

Consumption, the previously weakest engine compared with exports and
investment, has caught up as retail sales grew 15.4 percent in the first
half, 2.1 percentage points more than the rise in the same period last
year. Fixed assets investment rose 25.9 percent, down 3.9 percentage
points.

Related readings:
?GDP grows annual average of 9.67% from 1978 to 2006
?GDP grows 11.1% in first quarter
?GDP predicted to grow by 10.8%
?NDRC predicts over 3% CPI rise for 2007
?Central bank: CPI to grow 3.2% in 2007

"The changes in domestic demand since the beginning of the year are what
we were expecting," Li said, attributing the faster consumption to the
rising income of the public.

China has used a full arsenal of industrial and taxation policies to help
the poor, including subsidizing low-income families and farmers,
increasing minimum wages for migrant rural workers and investing more in
education, medical care and housing.

"We are keeping a close watch on what direction the accelerated economic
growth is taking," said Li, "but whether or not the economy is overheated
is a comprehensive issue that should be viewed from different angles."

In the first half, the primary, secondary and tertiary sectors reported
947 billion, 5.55 trillion and 4.18 trillion yuan in added value, with
the secondary sector, including manufacturing, mining and construction,
growing at the fastest year-on-year rate of 13.6 percent.

The primary sector posted a growth rate of 4.0 percent and the tertiary
sector, including transport, telecommunications, catering, tourism,
banking and insurance, recorded an increase of 10.6 percent.

(For more biz stories, please visit Industry Updates)

Chinese School

Chinese Online Class - Domestic M&As up sharply in 1st half

?  ?

BIZCHINA / Center

Domestic M&As up sharply in 1st half

By Hu Yuanyuan (China Daily)
Updated: 2007-07-18 09:55

The number of China's domestic mergers and acquisitions (M&As) jumped in
the first half of the year as funds raised in buoyant equity markets were
put to use to consolidate fragmented industries, analysts said yesterday.

Domestic deal volumes grew from 317 in the first six months of 2006 to
454 in the first half of 2007, according to data by the industry journal
M&A Asia.

"With all the attention on China's overseas acquisitions, it is often
forgotten that many Chinese companies have attractive and immediate
acquisition opportunities at home at the moment," said Gabriel Wong, a
corporate finance partner of PricewaterhouseCoopers (PwC), an
international accounting firm.

M&A Asia statistics also show that combined incoming and domestic deals
in China increased by 20 percent to 808 in the first six months of 2007.

Total value of the disclosed deals in the first six months fell slightly,
however, to $27.6 billion compared to $29.4 billion last year.

Related readings:
?M&As face security scrutiny
?Economy fuels M&As in China
?More M&A deals set to occur in China

"Deal value is particularly difficult to interpret because there are many
large one-off transactions, such as sales of assets by State-owned groups
to listed parents and backdoor listings," said Zhao Liang, director of
PwC's transactions strategy team.

Industries that have seen high volumes of deal activity include sectors
that have been restructured from full State ownership, such as energy,
steel and cement, according to PwC.

"In newer, deregulated sectors, M&A activity is also strong, but is
driven by market imperatives," said Wong, citing the retail sector as an
example, where national chains are forming from regional and city-based
businesses.

The volume of announced overseas acquisitions increased by 72 percent, to
31 from 18 in the first half of last year. But with no acquisitions
larger than $1 billion in 2007 - two oil deals of $5.9 billion were
announced in the same period of 2006 - the value of outbound deals
decreased by 64 percent.

(For more biz stories, please visit Industry Updates)

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Related Stories ?

� M&As face security scrutiny
===========================================================================
� Economy fuels M&As in China
===========================================================================
� More M&A deals set to occur in China
===========================================================================

Chinese Online Class

Learn Mandarin online - CSRC OKs China Futures buyout by China Securities

?  ?

BIZCHINA / News

CSRC OKs China Futures buyout by China Securities

(Chinadaily.com.cn)
Updated: 2007-07-17 08:32

The Chinese securities regulator on July 10 gave the go-ahead to the
country's first futures company wholly owned by a securities firm, China
Business News reported on Monday.

China Futures has raised its registered capital to 150 million yuan
(US$19.7 million) from the current 34.88 million yuan, and been approved
by the China Securities Regulatory Commission (CSRC) to become a
wholly-owned subsidiary of China Securities.

Ding Jie, general manager of China Futures, said that CITIC Securities
and its two subsidiaries, China Securities and Wantong Securities, will
respectively hold a 41 percent, 49 percent and 10 percent stake in the
futures company.

One year ago, CSRC began to encourage securities firms to acquire shares
of futures companies by eliminating the 50-percent ceiling of ownership
in futures companies, simplifying equity change and takeover appraisal,
and allowing the purchasers to involve in the management of the subjects
in advance.

In addition, the Futures Exchange Management Regulations released this
March and other relevant rules no longer impose shareholding limitations
on the acquisition of futures companies by securities brokerages.

Securities brokerages like Huatai, Everbright, Guotai Junan, Guangfa, and
Changjiang also had plans to raise registered capital of their futures
subsidiaries, and have all applied to expand their futures shareholding.

Tan Xianrong, general manager of Changjiang Futures, regretted not
getting the regulator's approval yet, but he believed CSRC's approval of
China Futures to be wholly owned by a securities firm was a breakthrough
for the development of China's futures sector.

(For more biz stories, please visit Industry Updates)

Related Stories ?

� New futures likely soon
===========================================================================
� The long road to index futures trading
===========================================================================
� Index futures edge closer
===========================================================================

Learn Mandarin online

Chinese language - 2006 GDP growth revised up to 11.1%, highest in 12 years

?  ?

BIZCHINA / Index & Statistics

2006 GDP growth revised up to 11.1%, highest in 12 years

By Dai Yan (chinadaily.com.cn)
Updated: 2007-07-12 10:13

China's GDP growth in 2006 has been revised to 11.1 percent, up 0.4
percentage points from the preliminarily calculated growth rate, to
become the highest of the past 12 years, the National Bureau of
Statistics (NBS) said on its website yesterday.

China's annual GDP calculation goes through three steps: preliminary
calculation, preliminary verification, and final verification. The
revision was based on the second step.

The GDP in 2006 was revised to 21.09 trillion yuan (US$2.79 trillion)
based on current price levels, 146.4 billion yuan higher than the
preliminarily calculated figure.

According to NBS, added value of primary industries increased five
percent to 2.47 trillion yuan last year, up 3.7 billion yuan from the
figure based on preliminary calculations. That of secondary industries
grew 13 percent to 10.32 trillion yuan, up 0.5 percentage points or 115.8
billion yuan from the preliminary figures. That of tertiary industries
was up 10.8 percent to 8.3 trillion yuan, 0.5 percentage points or 26.9
billion yuan higher than the preliminarily calculated figures.

According to the revised figures, primary industries accounted for 11.7
percent of the 2006 GDP, secondary industries 48.9 percent, and tertiary
industries 39.4 percent.

(For more biz stories, please visit Industry Updates)

Chinese language

Learn Chinese - Hangxiao suspends trading over hampered contract reports

?  ?

BIZCHINA / Photos

Hangxiao suspends trading over hampered contract reports

(Shanghai Daily)
Updated: 2007-07-10 13:50

Trading in Shanghai-listed Hangxiao Steel Structure Co was
suspended?Monday as the company was obliged to clarify media reports
saying its contract, worth billions of United States dollars with the
government of Angola, was under reconsideration.

The National Reconstruction Department of the African country has
canceled some contracts with China International Fund Limited, which
indicated other deals may be jeopardy, including Hangxiao's house
construction agreement. The contract is worth 34.4 billion yuan (US$4.52
billion), China Business News reported, citing an insider with the fund
as saying last week.

The report triggered Hangxiao to issue an urgent statement to the
Shanghai Stocks Exchange that it will halt trading today to "clarify news
reports."

On May 10, Hangxiao and its senior managers were fined about one million
yuan for violating information disclosure rules by China's securities
watchdog.

Shares of Hangxiao soared by the 10-percent daily limit for four straight
days before the firm announced huge orders for building materials and
services in Angola.

The company was accused of not releasing information about its
negotiations with Angola until the two parties had signed a draft
agreement. This violated rules on information disclosure, said the stock
exchange in a statement on May 11.

The company will only be allowed to resume stock trading after an
official public explanation about its investment situation in Angola,
according to China's stock rules.

(For more biz stories, please visit Industry Updates)

Learn Chinese

Chinese Online Class - Pentagon: US surprised by rapid arms modernization

CHINA / National

Pentagon: US surprised by rapid arms modernization
(chinadaily.com.cn)
Updated: 2006-05-24 09:11

An annual report from the US Department of Defense says that China has
extended its military capability and caught the Pentagon somewhat off
guard.

The outside world has little knowledge of Chinese intentions and decision
making of its key capabilities while China is modernizing its armed
forces, said the 2006 "Military Power of the People's Republic of China",
which was released on Tuesday .

The report, delivered to the US Congress, guesses Chinese defense
expenditure at "two to three times the officially disclosed figures".

China's foreign ministry is yet to respond to the Pentagon report.
China's military spending of less than US$40 billion in 2005 is only
one-10th that of the United States.

Chinese officials have once and again dismissed US warnings about its
modernization, saying the military build-up serves national security
needs and protecting its territory as any large nation would.

The Pentagon report reads as if it was written to balance cautionary
language about US military competition with China, with carefully chosen
words expressing optimism for harmonious relations with Beijing, a report
of the New York Times said.

The Times said that the report takes on a diplomatic life of its own,
sparking an annual round of analysis and criticism from the United States
that, in turn, prompts an annual round of criticism and analysis from
China.

"The United States welcomes the rise of a peaceful and prosperous China,"
the report states. "US policy encourages China to participate as a
responsible international stakeholder by taking on a greater share of
responsibility for the health and success of the global system from which
China has derived great benefit."

The Chinese military, according to the report, has embarked on a
long-term effort to change from a large army designed for wars of
attrition on its home territory into "a more modern force capable of
fighting short duration, high intensity conflicts against high-tech
adversaries."

While acknowledging that China has only a limited ability to sustain
military operations at great distances, its armed forces have the
potential to compete with the United States by fielding "disruptive
military technologies that could over time offset traditional U.S.
military advantages."

What that means in the near term, the report adds, is that China will
continue its efforts to build up its forces across the strait from Taiwan.

"Several aspects of China's military development have surprised US
analysts," the report states, "including the pace and scope of its
strategic forces modernization." The term "strategic forces" applies to
long-range nuclear weapons.

China is modernizing its longer-range ballistic missiles by upgrading
some systems and replacing others with mobile, quick-launch models, the
report states.

The report details trends in China's ability to deny other military
forces access across the region by a combination of strike aircraft,
submarines and precision missiles. In all, the report argues, these
weapons "have the potential to pose credible threats to modern militaries
operating in the region."

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Learn mandarin - Russia, China urge peaceful solution for nuke row

CHINA / National

Russia, China urge peaceful solution for nuke row
(AFP)
Updated: 2006-05-16 19:21

Russia and China will "definitely not" approve the use of force against
Iran over its nuclear program, Russian Foreign Minister Sergei Lavrov
said after meeting with China's leaders.

Russian Foreign Minister Sergei Lavrov (L) meets Chinese President Hu
Jintao in Beijing. Lavrov said Russia and China will "definitely not"
approve the use of force against Iran over its nuclear program. [AFP]

"Russia and China will definitely not vote for the use of force to
resolve this issue," Lavrov said through a translator after meeting with
his Chinese counterpart, Li Zhaoxing, and President Hu Jintao.

"We believe we shouldn't isolate Iran or increase pressure. This will not
only not reduce the possibility of proliferation of weapons of mass
destruction, it will have the opposite effect."

However Lavrov also said Russia believed Iran needed to do more to
cooperate with the United Nations nuclear watchdog, the International
Atomic Energy Agency.

"Iran at the moment has not completely replied to and given explanations
on the questions raised by the IAEA investigation," Lavrov said.

"We regret this very much. We hope the Iran side will give a reply at an
early date."

The IAEA has been investigating Iran since 2003 and says it is not yet
able to certify that the Iranian nuclear program is strictly peaceful.

Iran says its nuclear program is a peaceful drive to generate electricity
but the United States and other Western nations say it is a cover for the
secret development of atomic weapons.

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Chinese School - China, Kenya agree to continue fostering relations

CHINA / Kenya

China, Kenya agree to continue fostering relations
(Xinhua)
Updated: 2006-04-29 12:37

NAIROBI -- Chinese President Hu Jintao and Kenyan President Mwai Kibaki
agreed to continue fostering friendly and cooperative relations for
mutual benefit, says a joint communique issued here Friday.

It says that the two leaders held discussions in a "warm and cordial"
atmosphere, had an in-depth exchange of views and reached broad agreement
on bilateral relations and international issues of common interest.

They agreed to continue the momentum in the exchange of high-level visits
to enhance mutual understanding and friendship and deepen cooperation in
all fields, says the communique.

The two leaders agreed to continue to support each other over issues
concerning sovereignty and territorial integrity, it says.

The Kenyan side reiterated its adherence to the one-China policy, saying
that the government of the People's Republic of China is the sole legal
government representing China and Taiwan is an inalienable part of the
Chinese territory, according to the communique.

The Kenyan government expressed its opposition to "Taiwan independence"
in any form and expressed its support for China's efforts to realize
national reunification, it says, adding that the Chinese side highly
appreciated the position of the Kenyan side.

It says the two sides expressed readiness to expand exchanges and
cooperation in culture, education, health, tourism, press, environmental
protection and sports.

They noted that economic cooperation between the two countries had great
potential and agreed to strengthen their cooperation in agriculture,
energy, trade, investment, infrastructure, science and technology, says
the communique.

The Kenyan side welcomed the China Policy on Africa released bythe
Chinese side that indicates the Chinese side's readiness to establish and
develop a new-type strategic partnership with Africa, featuring political
equality and mutual trust, economic win-win cooperation and cultural
exchange, the communique says.

Hu arrived here Thursday on a three-day state visit to Kenya as Kibaki's
guest.

Kenya is the last leg of Hu's five-nation tour which has already taken
him to the United States, Saudi Arabia, Morocco and Nigeria.

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