BRIEFS

GENERAL

Fast-food part-timers underpaid

China's main trade union weighed into the McDonald's and Yum Brands labour dispute, saying that the fast-food companies did break the law by underpaying part-time workers in Guangzhou. The government-supported ACFTU also said it would widen the investigation to other parts of China. The situation emerged after reporters from a local newspaper working undercover in McDonald's and Yum-owned KFC and Pizza Hut claimed that student employees were being paid less than Guangzhou's minimum hourly wage. The companies deny breaking the law.

Work-permit system hurts migrants

As more rural workers continue to flow into the cities, the 50-year-old hukou migration-control system no longer seems beneficial, suggests a new study. Beijing's Renmin University estimated the capital's "floating population" at 3.57 million people, most of whom stay in the city almost five years. Under the hukou policy, dividing the population into rural and non-rural, floaters are not given social security, education, medical care, or housing assistance. Zhang Chewei, vice-president of the Research Institute of Population Science at the Chinese Academy of Social Sciences, said the system needs work and it "hinders market development in both rural and urban areas."

Gamer IDs required

China plans to crack down on internet use under a new "real name verification system," allowing police to check the identity card numbers of all online game players. Millions of Chinese regularly log on for role-playing and fantasy games, as well as massive online communities. This push to "purify" the internet, by requiring all users, including bloggers, to disclose their true identities online, will allow police to check each individual's 18-digit ID number. Players who are under age 18 will only be allowed to play games with "anti-addiction" features.

Chinese autos ramp up

China's auto output and sales soared more than 20 percent in the first quarter of this year. China's annual production increased by 22.6 percent, producing 2.19 million vehicles in the first quarter, while auto sales rose 22.2 percent to 2.12 million vehicles. March's output hit a record high of 853,800, as did sales which topped 847,000 units. China overtook Japan to become the world's second largest market for new vehicles in 2006, next only to the US with sales of 7.22 million units.

Siemens doctors the countryside

Siemens began a five-year, US$10 million (?7.4 million) healthcare project aimed at improving access to better healthcare services for people in rural areas of China. The project will begin in Luochuan County in Yan'an, Shaanxi province. Siemens will equip the county-level hospital with a full range of diagnostic imaging equipment including ultrasound, x-ray and CT machines. The company will also provide medical and other training to support the education of physicians, along with installing water treatment equipment to prevent environmental threats from the hospital's wastewater

TRADE

oreign reserves hit new high

Foreign exchange reserves topped US$1.2 trillion (?889 billion) at the end of March in China - who already holds the world's largest reserve of foreign currency. In the first quarter, US$135.7 billion was added, pushing holdings up by 12.7 percent from the end of 2006 and 37.36 percent year-on-year, according to the People's Bank of China. Continuous increases in foreign direct investment jumped by 11.6 percent to US$15.9 billion in the first quarter, about one-fourth of 2006's US$63 billion total. The hike is much greater than economists expected and it shows that more money is flowing into China than out of it.

More trades prohibited

China is going to ban more categories of chemical and resource products, in its latest move to restrict export of resource-intensive products and to balance trade. The 2007 Prohibited List for Processing Trade - released annually by the commerce ministry, the General Administration of Customs and the State Environmental Protection Administration since 2004 - includes 186 new categories, and bans processing trade firms from dealing in 990 products. The list includes products such as heavy diesel oil, apatite and lanthanon ore and other non-renewable resources, energy-consuming and high-polluting products.

US files WTO complaints

The Uniited States launched a string of actions against China in early April over suspected trade barriers and piracy of books, music, videos and other goods. China's trade surplus appears to have nearly doubled in March to US$20 billion (?14.7 billion), from US$11.2 billion a year ago, which likely prompted this US response to the WTO. The action follows complaints in March, threatening stiff duties on some imports, and February, over subsidies of manufactured goods.

China-Swiss trade underway

Switzerland aims to establish a free trade agreement with China, according to Swiss Economics Minister Doris Leuthard. Leuthard told local media that she would lead a large business delegation to China in June, and try to give support so that China opened negotiations with Switzerland. Leuthard said such deals are important for Switzerland, given that that are not a member of the European Union, the North-American free trade zone or the Asian community of nations.

China to cut copper imports

Traders and analysts say that China, the world's largest consumer of copper, may slash imports by half in the second quarter, due to soaring prices. Copper jumped 45 percent to near US$8,000 (?5,900) per tonne in the last two months as China more than doubled imports. This quarter, refined copper and alloy imports may drop to 100,000 tonnes per month from an estimated 190,000 tonnes. Stockpiles in Shanghai Futures Exchange warehouses - which fell 46 percent last year, as world prices reached record highs of US$8,800 a tonne - are now at their highest in nine months. China could export as much as 10,000 tons of refined copper a month in the second quarter.

TECHNOLOGY

Low-energy PCs for China

Hewlett-Packard and Taiwan-based chipmaker Via Technologies will launch a low-energy PC in China to tap China's demand for "carbon neutral" products. The dx2020 will be marketed as a powerful computer with a low total cost of ownership, and will run on a Via processor that needs a maximum of 20 watts. Via said demand for energy-efficient information technology comes especially from fast-growing emerging markets like China and India. This top-tier joint venture is a first for the five-year-old Taiwanese group, which has a tiny share of the processor market compared with giants Intel and AMD.

Google plagiarism a "mistake"

Google apologised after being caught with copied software from its rival, Sohu. The company's new pinyin input method editor tool helps users type characters with the pinyin romanisation and suggests possible characters after just a few letters. The similarities were pointed out by Sohu.com shortly after Google released the tool. "We are willing to face up to our mistake," Google said. The complaints and apology highlighted the intense competition for market share among internet search engines to create a better Chinese input method offering easier access to its hundreds of millions of users. Sohu had been threatening to sue Google over the matter.

Mobile licences fair game

Committed to the WTO, China may issue multiple licences for high-speed mobile phone services. China's information industry minister, Wang Xudong, said China would be "technologically neutral," issuing more than one licence for 3G services. The country's service standard isn't yet certain; in January 2006 it chose a domestically developed TD-SCDMA. The granting of licences is subject to constant delays, although the government has committed to have 3G services available in time for the Olympics, at least in Beijing.

CONSUMER

Counterfeit crackdown

China has extended criminal penalties for music and movie piracy to people caught with smaller amounts of counterfeit DVDs or CDs, after foreign complaints that enforcement was too lenient. The decision by the Supreme People's Court comes amid pressure by foreign governments, plus the film and music industries, to stamp out China's rampant product piracy industry. The court cut in half the number of counterfeit DVDs, CDs or other audiovisual products, which trigger criminal penalties of up to three years in prison, and raised fines for smaller offenders.

Budweiser aims to double

Anheuser-Busch will build a US$63 million (?46.3 million) brewery in the southern province of Guangdong, aiming to double China's sales of Budweiser in five years. With a production capacity of 2.6 million hectolitres, it is scheduled for completion in late 2008. By supplying 100 new cities with populations of at least 1 million, the American brewer intends to bring Budweiser to a further 150 million potential drinkers. This year it plans a 33-market expansion of Harbin beer, its locally acquired brand as of 2005. Already, Anheuser-Busch's China investment exceeds US$1.8 billion. In 2006, China's beer market saw a third consecutive year of double-digit volume growth.

Record for Chinese art

Sought-after artist Xu Beihong's 1939 painting sold for US$9.2 million (?5.6 million) at an auction at Sotheby's in Hong Kong in mid-April. The price beat the Chinese artist's own record of US$6.2 million, earned by his work "Slave and Lion". The oil painting is part of a Sotheby's sale in Hong Kong aimed at testing Asian buyers' feelings in the wake of a stock market downturn that wiped US$400 billion off the region's share values in late February and early March. Sotheby's does not anticipate the feverish bidding of past auctions, though in recent years Chinese art has jumped in value.

BANKING

Exchanges have soared

Total profits in Shanghai and Shenzhen listed companies likely jumped by two-thirds last year. Profits for all companies listed in the two exchanges topped around US$51 billion (?37.5 billion), at least 62 percent higher than the US$32 billion reported for 2005. This was partly driven by huge surges among some of the largest companies, including Industrial and Commercial Bank of China, Bank of China, China Life and Ping An. ICBC alone, which announced net profits of US$6.3 billion, accounted for 21 percent of all reported profits.

New stock regulations

New rules on share trading were issued by China's securities regulator, intended to strengthen management of stock holdings and transactions by board members and senior managers of the listed firms as mainland bourses hit record highs. The China Securities Regulatory Commission (CSRC) limited trading by senior managers for one year to 25 percent of the company shares they held in the previous year, and banned them from trading within a year of a firm's listing or six months after leaving the company. The CSRC also forbade buying or selling 30 days before regular reports, or 10 days before performance forecasts. The mainland market has gained almost 25 percent this year as new mutual funds continue to buy A-shares.

CITIC holds dual listing

China CITIC Bank, planning the second -ever simultaneous dual listing in H-shares and A-shares, began offering subscriptions for the A-share portion of its initial public offering mid-April. The bank plans to offer 2.3 billion A-shares in Shanghai and 4.89 billion H-shares in Hong Kong. The bank, China's seventh-largest by assets, did not say how much it aimed to raise, but people familiar with the deal said the figure would be between US$4 billion and US$5 billion (?2.9-3.6 billion). Industrial and Commercial Bank of China was the first Chinese firm to list simultaneously in both A- and H-shares last year in what is still the world's largest initial public offering.

ICBC profits up

China's largest lender, Industrial and Commercial Bank of China (ICBC), announced a 31 percent rise in annual profits to US$6.4 billion (?4.7 billion) in early April. ICBC Chairman, Jiang Jianqing, said the bank only targeted modest growth in lending, as it placed greater emphasis on wealth management and other fee-based products, and added that ICBC would pursue overseas expansion in the coming year and participate in investment banking and capital markets - regulators permitting. In October 2006, ICBC hit a world record of US$6.4 billion in initial public offerings.

Foreign banks lend to Chinese

Citigroup, Bank of East Asia, HSBC and Standard Chartered began providing retail loans to Chinese citizens, bidding an increase of their presence in the Asian market. The banks are offering a more extended range of yuan-denominated services in Shanghai due to new regulations on opening the Chinese banking market to foreign competition. Four foreign banks have won regulatory approval in early April, to incorporate locally in China, and now have access to China's US$2 trillion (?1.4 trillion) of household savings. Beijing agreed to open up its tightly held industry when it entered the WTO in 2001.

Banks take a hike

China announced plans to raise banks' reserve requirement ratios for the third time this year. The half-percentage-point rise may be the beginning of a more aggressive approach to curb liquidity and control investment growth. The hike will take effect mid-April and raise the ratio for commercial banks to 10.5 percent. It follows several interest rate hikes and investment curbs on a variety of industries over the past year. Economists expect similar hikes at least once every quarter this year.