Official promises greater IPR enforcement

Beijing will set up 40 service centres offering advice and funding for people who cannot afford to apply for intellectual property rights (IPR) protection as part of efforts to better enforce IPR within China. State Intellectual Property Office commissioner Tian Lipu said high-tech enterprises will be a high priority under the new mechanisms. Domestic companies and research institutes submitted 5,401 patent applications last year, while foreign firms submitted 92,000 applications.

New product safety standards to roll out

BUSINESS

Chinese Premier Wen Jiabao introduced a raft of new product safety standards at the National People's Congress. Wen said the new standards' aim is to restore the reputation of the "made in China" label and bring requirements and testing methods for products manufactured in China in line with international norms. In total, 7,700 new standards will be put in place this year, covering food products, drugs and other consumer goods. Wen also promised better oversight and tougher penalties for those who violate the rules. China is expected to enact its first national food safety law this year.

Nike sees 'gaps' in China's labour laws

Nike has said workers at its 180 factories in China do not enjoy the same protection as its employees in other countries due to "gaps" in the country's labour laws. In the company's inaugural report on corporate social responsibility initiatives in China, it commended the Chinese government for steps taken to increase protection of workers' rights, but said that Chinese law still fell short of "basic protections outlined under the [International Labour Organisation] Convention." The effectiveness of the country's new Labour Contract Law, which became effective on January 1 of this year, was recently defended by Sun Baoshu, vice-minister of labour and social security, who said that resistance to the law was due to misinterpretation on the part of employers.

BHP, Rio barred from iron ore spot market

BHP Billiton and Rio Tinto Group have been prevented from selling iron ore on the spot market in China by industry arms of the Chinese government. Neither BHP Billiton nor Rio Tinto has been able to send a single spot shipment to China since January 1. Meanwhile, spot sales from other companies have been able to continue. The boycott may have already cost Australia as much as US$276 million (€177 million) in export profits.

China Railway makes muted debut in Hong Kong

China Railway Construction, which raised US$5.4 billion (€3.5 billion) in its combined Hong Kong and Shanghai initial public offering, saw its shares rise 14 percent on its Hong Kong debut. The relatively subdued performance, which came on a day when the Hang Seng Index fell by more than 2 percent, was widely expected. One broker said China Railway Construction needed to post a first-day gain of around 20 percent to reassure investors. The failure to do so casts further doubt on China Pacific Insurance's US$4 billion IPO, which was delayed. China Evergrande Real Estate's US$2.1 billion Hong Kong offering is still proceeding. China Railway Construction's shares rose by a weaker-than-expected 28 percent on its earlier Shanghai debut.

EU-CHINA

EU members push for China compressor tariffs

European commissioners from Italy, Germany and France have called for punitive tariffs on air compressors in response to concerns that China is dumping the products in Europe below cost. The commissioners are looking to overrule a previous decision by European Union Trade Commissioner Peter Mandelson, who recommended against the imposition of duties. China, which holds 50 percent of the European market for these devices, would be forced to pay US$44 million (€28 million) in duties annually under the terms the commissioners are pushing for. Italian air compressor producers, whose complaints had launched the discussion, stand to benefit an estimated US$10.4 million.

EU, China to begin holding top-level talks

The EU will send a delegation of high-level officials, including European Commission President José Manuel Barroso, to Beijing to hold talks with Chinese leaders this spring. The April 25 talks, which could include five to eight other EU commissioners, will focus on climate change, China's trade surplus with the EU and other economic issues. An aim of the meetings will be to elevate Sino-European ties to a level similar to that created by the twice-yearly strategic economic dialogue held between the US and China. In November the president of the European Central Bank, the European monetary affairs commissioner and the chairman of the eurozone finance ministers' group visited Beijing for a meeting with Chinese central bank president Zhou Xiaochuan, which was followed by an EU-China summit.

SEPA issues new environmental regulations

A new regulation released by China's State Environmental Protection Agency (SEPA) will require China's heavily polluting and energy-intensive industries to fully disclose their environmental impact. The new rule will apply to both listed and non-listed firms across 13 sectors, including thermal power generation, iron, steel and cement, but will be limited only to companies operating in more than one province. SEPA Deputy Director Pan Yue said that, under existing laws, companies provide only "scantily useful facts," and the government would step up enforcement. A draft law was submitted to the Standing Committee of the National People's Congress that would impose heavy fines on executives responsible for water pollution. A time frame for the rule's implementation was not released. Separately, SEPA blacklisted 141 products that pose "serious environmental risks".

ENVIRONMENT

Environment agency delayed 10 public listings

China's environmental watchdog, the State Environmental Protection Administration (SEPA), said it forced the delay of 10 domestic IPOs last year due to non-compliance with environmental rules. Most of the delayed offerings, including one by China Coal Energy, the country's second-largest coal producer by output, were later approved. Two companies still have not won regulatory approval. SEPA said it delayed approval for reasons including excessive emissions, insufficient waste-treatment plants and outstanding pollution lawsuits against the companies or their subsidiaries. All the delays came in the second half of 2007, and were seen as examples of SEPA's strategy of targeting companies' purse strings to bring them into compliance with environmental rules.

MEMBER NEWS

Ping An Insurance to invest $6.6bn in Fortis

Ping An Insurance announced that it will buy half of Fortis NV's asset-management arm for US$3.36 billion (€2.16 billion) and has raised its total holdings in the Dutch-Belgian bank to 4.99 percent. The US$6.6 billion combined investment is the largest overseas investment by a Chinese financial-services firm. The deal comes after Fortis reported a US$4.2 billion write-down in subprime-mortgage exposure. Fortis joined other Western financial institutions Citigroup and UBS AG in seeking money from the Middle East and Asia to recover from subprime damage. The asset-management sale still requires regulatory approval and completion of terms.

CLSA taps ex-Morgan Stanley head as China chief

CLSA has hired former Morgan Stanley China chairman, Wu Changgen, as its first China head. The brokerage's China-related business was formerly led by CLSA's chairman, chief executive and a business development group. Wu left Morgan Stanley in January after 10 years with the firm, and earlier worked at Bank of China for 18 years. He said he was still developing his China strategy and that CLSA should focus on existing business lines. Wu will oversee the firm's expansion in China as the country's financial services market grows rapidly amidst expectations of further liberalisation in the sector.

Knight Frank appoints new office services heads

Knight Frank has appointed two new directors of office services in its Shanghai and Beijing offices. Bruce Sutherland, an experienced real estate executive coming most recently from a real estate company in Qatar, will fill the post in Shanghai, where he will oversee Knight Frank's east China tenant representation and project marketing teams. Mark Sullivan joins the firm's Beijing office, taking control of the north China tenant representation, project marketing and fit-out contract administration teams.

Schenker, BAX complete mainland merger

Schenker China, BAX Global and subsidiary BAX Global Freight Forwarding have completed a business merger. The joint company began operating as Schenker China on March 1. The deal follows earlier mergers of BAX and Schenker's respective Macau and Hong Kong units, as the two logistics companies are in the process of integrating worldwide. Schenker China is the official supplier of freight forwarding and customs clearance of the 2008 Olympics in Beijing.

NPC ends with new appointments, ministries

The National People's Congress (NPC) concluded with several appointments to top government posts and a bureaucratic restructuring to create five new "super-ministries". The NPC endorsed Li Keqiang as the first-ranked vice-premier, making him the likely successor to Premier Wen Jiabao when Wen's second term expires in five years. Xi Jinping was appointed vice-president, a post that is believed to put him next in line for the presidency and the Communist Party's chairmanship. Li, a protégé of President Hu Jintao, and Xi, who recently served as party secretary of Shanghai, were named to the Communist Party's Politburo Standing Committee last October. Other newly minted vice-premiers are former Beijing mayor Wang Qishan and former Guangdong party secretary Zhang Dejiang. The five newly created ministries will be the Ministry of Industry and Information, the Ministry of Human Resources and Social Security, the Ministry of Environmental Protection, the Ministry of Housing and Urban-Rural Construction, and the Ministry of Transport. The government will establish a body to coordinate between the central bank, the finance ministry and the primary economic planning body, the Ministry of Health will be upgraded to oversee food and drug safety.

Inflation soars, official projection stays low

Premier Wen Jiabao said the Chinese government would continue to aim at the official inflation target of 4.8 percent for the year, despite the 8.7 percent inflation recorded in February, a 12-year high. Wen also said that he was "deeply worried" about the impact of the US subprime crisis on the global economy, but that the crisis would not darken China's prospects. "China still has vast market potential, especially in rural areas. That is why we are confident of China's economic prospects," he said. Goldman Sachs lifted its China inflation forecast for 2008 to from 4.5 percent to 6.8 percent. People's Bank of China (PBOC) earlier announced that M2, a broad measure of total money supply, had risen 18.94 percent in January from a year earlier and was up 2.2 percent from the previous month. The central bank, which said it will persevere with its tight monetary policy this year to hold off rising prices, raised banks' reserve requirement ratio for the 15th time since mid-2006 to a record 15.5 percent.

BASF, Sinopec explore $900m expansion

BASF and Sinopec Corp have submitted the technical and commercial feasibility study for the approval of the planned US$900 million (€570 million) expansion of their joint chemical Verbund site in Nanjing to the Chinese government. The proposed expansion of the site, operated by the BASF-YPC joint venture, is aimed at increasing the production capacity of the ethylene oxide plant and enlarging existing oxo-alcohol and propionic acid plants, among other projects. The completion of the study was formalised by Wang Tianpu, president of Sinopec Group, and Martin Brudermüller, member of the Board of Executive Directors of BASF SE, at a signing ceremony in Beijing.