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High-Speed Rail to Shanghai Coming

Construction of a high-speed rail link between Beijing and Shanghai that will use the country's own highly advanced railway technologies will begin within the year, the Ministry of Railways announced on April 3. With preparatory work already under way, the 1,318-kilometre passenger line is expected to begin operations by 2010 when the World Expo will be held in Shanghai, the ministry said. Upon completion, it will take only five hours to travel between Beijing and Shanghai, nine hours less than now. The existing Beijing-Shanghai railway will mainly be used for freight transport by then, with an estimated one-way transport capacity of at least 130 million tons each year. The ministry called the Beijing-Shanghai high-speed railway "the most technology-intensive railway with the largest investment" among all the railways to be built before 2020 under the ministry's plan.

CDB and CCB in Banking Co-op

Two of China's top four banks have reached a major agreement under which they will cooperate in offering a range of services. The China Development Bank and the China Construction Bank announced their agreement in a news release on March 29.
As two of China's "Big Four" banks, the CCB and the CDB said they will share services and cooperate in a number of areas, including syndicated loans, asset management, funds settlement, asset securities, joint bank cards, services for small and medium enterprises and in property financing. The two pledged to "actively seek out mutually beneficial cooperation and to use each other's advantages."
CDB, in tandem with two other policy banks that have long provided government-backed financing for agriculture and foreign trade activities, was established in 1994, devoting itself to loan support for the nation's infrastructure and high-tech industries.

　　
China Processed Oil Prices Boosted

China will increase the prices of processed oils as of March 26. It will also establish a mechanism to offer subsidies to some disadvantaged communities and public service sectors. In a circular made public on March 26, the National Development and Reform Commission, which regulates energy prices, said the producer prices of gasoline will be raised by 300 yuan (US$37.5) per ton and that of diesel oil will increase by 200 yuan (US$ 24.90) per ton. To offset the effect of the price hikes to communities sensitive to higher prices, the commission said China's State Council has decided to create a mechanism to subsidize some of the communities and public service sectors affected. The recipients of the subsidies include grain growers; fishermen and fishing firms operating and farming offshore or in inland areas, using oil-driven fishing boats; State-owned forestry enterprises and nurseries of forestry centres and urban public transportation firms, the commission said.

Mainland Offers Late-night Flights
March 26 marks the beginning of the summer and autumn travel season on China's civil aviation schedule. From now on, late-night flights will be offered. Stimulated by market demands, China's aviation authority has finally lifted its ban on late-night flights, which had been in effect for four years. According to the General Administration of Civil Aviation of China, flights can depart as late as 2 a.m. from domestic airports and from 4 a.m. in the Xinjiang Autonomous Region. Six airports are allowed to open from 2 a.m. to 6 a.m. for international flights, regional flights and cargo flights. The new schedules will increase airplane usage efficiency and will help reduce costs. Similar flights began in the United States in 1959. In the past, in China, late-night or red-eye flights have mainly been charter flights to tourism destinations. The price is only half that of ordinary flights, perhaps even lower. Late-night flights are favoured by passengers and airlines, but were banned four years ago out of concern for safety.

Asia's Largest Mobile Radio Network Built
A leading European telecommunication network provider has built Asia's largest professional mobile radio (PMR) network in Beijing, serving more than 34,000 law-enforcement officers and urban facilities supervisors, according to China Daily. Jean-Marc Nasr, chief executive officer of the European Aeronautic Defence and Space Company (EADS) Secure Networks, said at a press conference on March 22 that the reliability of PMR featuring the terrestrial trunked radio (TETRA) standard was fully proved during the recent annual sessions of both the National People's Congress and the Chinese People's Political Consultative Conference. TETRA professional mobile radios that combine the traits of walkie-talkies and mobile phones are expected to be provided to customs, traffic and patrol police officers. EADS Secure Networks was created following a major deal that saw EADS buying Nokia's PMR business. The addition of Nokia's TETRA business means that EADS has more than 130 PMR customers in 56 countries.

Consumption Tax Levied on Luxury Items
China announced on March 21 it would impose a consumption tax on disposable wooden chopsticks, wooden floor panels, yachts, luxury watches and more oil-based products as of April 1, 2006. The Ministry of Finance said the plan had been approved by the Chinese Government and was designed to control and regulate energy consumption, help protect the environment by reducing consumption of timber, and narrow the gap between the poor and the rich by collecting a consumption tax on luxury items. China will collect a 5 percent consumption tax on disposable wooden chopsticks to discourage their use because they waste timber, according to the ministry. The production of disposable chopsticks consumes 1.3 million cubic metres, about 2 million cubic metres, of Chinese timber each year, the ministry said. China sells 10 million boxes of wooden chopsticks domestically and exports about 6 million boxes each year, which amounts to 15 billion pairs of chopsticks, according to the statement.

3 Group, Microsoft Sign Global Mobile Services Agreement
3 Group, one of the leading global players in the 3G arena, and Microsoft announced plans on March 20 to deliver seamless access to Microsoft's communication services, MSN Messenger and MSN Hotmail, through the 3 portal and via installed software clients on 3G handsets. According to a press release from 3 Group, a division of Hutchison Whampoa, these services will provide millions of customers with different ways to say in touch using their 3G mobile phone. This newly signed agreement enables 3 Group to offer access to MSN Hotmail and MSN Messengers from a browser or by a downloaded and pre-installed software client. As part of the agreement, all services offered will bring the familiar look and feel of PC-based MSN Messenger and MSN Hotmail services to a 3 mobile communications device, providing customers with a convenient way to stay in-touch while on the move using an experience with which they are already accustomed. The agreement joins a community of millions of MSN Hotmail and MSN Messenger users and customers of the 3 Group worldwide.

PetroChina Increases Exploration Budget
PetroChina has announced a key increase in capital expenditures for the second year, mainly to increase its exploration activities. The hike comes in the wake of a record annual profit report. The company on March 20 said it had budgeted 149 billion yuan (US$ 18.5 billion) of investment spending for this year, up 19.39 percent from last year's realized outlay of 124.8 billion yuan (US$ 15.6 billion). Last year's spending was 28 percent higher than the figure it estimated a year ago and 21.16 percent more than that projected in its June filing with the United States Securities and Exchange Commission. PetroChina also posted a 28.4 percent increase in net profit to 133.36 billion yuan (US$16.6 billion), 4.57 percent short of analysts' expectations, because of higher than expected refining costs stemming from government controls on retail fuel prices. PetroChina's newly proven reserves exceeded its output by 4 percent last year, up from a 2 percent surplus in 2004. Total production rose 5.5 percent last year. PetroChina aims to increase its oil and gas output this year by 5.19 percent to one billion barrels of oil equivalent, on the basis of a 26 percent jump in gas output, while oil production is planned to grow by only 0.4 percent.

Insurers May Invest in Nation's Infrastructure
China's cabinet has approved plans to allow insurance companies to invest in infrastructural projects, the country's insurance regulator, The China Insurance Regulatory Commission, said. The move, designed to expand the investment options available to insurers, was followed by the issuance of detailed rules for the plan that will allow insurers to invest in highways, energy projects and urban facilities via specialised investment firms. Its statement and the rules appeared on its Web site at www.circ.gov.cn. Life insurers would be allowed to invest no more than 5 percent of their total assets at the end of the previous quarter in infrastructure. Property underwriters could invest no more than 2 percent of their assets, according to the rules. Chinese insurers held more than 1.52 trillion yuan (US$189 billion) in assets at the end of 2005, but they have been mostly limited to investing in low-yielding government bonds and savings accounts.

CAS Seeks Innovation in Research
The Chinese Academy of Sciences (CAS) will concentrate its efforts on 40 key research areas in the coming 15 years to help China's ambitious plan of becoming an "innovative nation." The measures were revealed in the Medium- and Long-term Development Plan of the CAS (2006-20), which was unveiled on March 20 during the group's annual meeting in Beijing, China Daily reported. According to the plan, its future research will focus on a range of key areas, including the development of the Internet, innovative drugs, biofuels development, nanotechnologies, clean energy resources, carbon dioxide capturing technologies and sustainable agriculture. To achieve its goals, the CAS will increase its investment by 70 percent in the coming five years over that of the previous five-years. Between 2011 and 2020, the annual investment in the research projects by the CAS will increase by about 12 percent. The National Middle- and Long-term Science and Development Plan issued by the State Council in early February vowed to increase annual investment in research and development to 900 billion yuan (US$112 billion) by 2020. This would boost the proportion of China's gross domestic product spent on research from today's 1.3 percent to 2.5 percent.

Volvo Builds in Chongqing
The Volvo Car Corporation, the Swedish arm of Ford Motor Company, announced on March 20 in Beijing that it would begin production in China this year to boost its presence in the world's third-biggest and fastest-growing car market, China Daily reported. The Goteborg-based carmaker said its new S40 sedan would be assembled at Ford's joint venture with China's Chang'an Motor Corporation in Chongqing Municipality later this year, under a technical licensing deal. The joint venture, called Chang'an Ford, will be Volvo's third manufacturing site in Asia, joining those already in Thailand and Malaysia. Volvo executives said the company expected the new car's annual output in China to reach 10,000 units in 2007. Volvo's plan appears to be motivated by rivals such as Audi, BMW and Mercedes, which are enjoying higher sales in China with their local production. Volvo currently sells the new S40, S80 sedan and XC90 sport utility vehicle as imports in China. In 2005, its China sales surged by 84 percent over 2004 to nearly 5,000 vehicles, including 1,400 S40s.

E-payments backed by Alibaba, Agricultural Bank of China
China's leading online-commerce firm Alibaba.com and the Agricultural Bank of China signed an agreement to cooperate on e-payments on March 16. The two sides will cooperate on e-payments for by both enterprises and individuals to reduce online trade credit risks and to boost the e-commerce market in China, according to the agreement. Alibaba.com, based in Hangzhou in East China's Zhejiang Province, runs online commerce sites that link foreign buyers with Chinese wholesalers. Its B2B (business-to-business) commercial base includes about 11 million member companies, according to Alibaba.com. The Agricultural Bank of China has about 30,000 branches and the leading e-banking network in the country.

Beijing Hyundai Plans Second Auto Factory
Automobile giant Hyundai of the Republic of Korea plans to build a second factory in Beijing; production is set to begin in 2008.
Xu Heyi, president of Beijing Hyundai, released the news at a national auto forum held in Beijing on March 15, according to Xinhua News Agency.
He said construction of the 300,000-unit output plant will begin "soon."
A research and development centre to be built in Beijing is part of the deal and will centre on designing more cars that meet the demands of Chinese consumers. The new factory is one step in Beijing Hyundai's new strategy to expand its production in China over the next five years.
Xu said Beijing Hyundai is now talking with the Hyundai Motor Company about introducing electrical-hybrid cars into the Chinese market. Facing tight energy supplies, Beijing Hyundai also plans to focus its new product on low-emissions cars and a new-style 1,4-liter engine is to debut on the Chinese market soon, according to Xu. Beijing Hyundai will join hands with Hyundai Motor Co. to realize scaled production of the fuel-cell cars to replace traditional fuel-engine cars.