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Brief2006/05/20
New Graduates Face Unemployment China will face serious employment difficulties during the next two quarters with 60 percent of new graduates facing unemployment, according to a report published by the National Development and Reform Commission quoted by Xinhua News Agency on May 8. The number of graduates will increase by 22 percent over the previous year to reach 4.13 million while the job market will be able to soak up 1.66 million new graduates, a decrease of 22 percent from the previous year. According to the report, because of stable economic growth, the first quarter saw a healthy employment situation with a registered urban unemployment rate of 4.2 percent, 2.52 million newly added urban labourers and 1.03 million laid-off workers re-employed. The level of surplus labour this year will reach 14 million, around one million more than last year, the report said.
Beijing Mobile Phone Operators to Slash Charges Chinese regulators on May 8 made a surprise move by giving a green light to telecom operators who want to slash mobile phone charges in Beijing, a China Daily report said. This will affect the current system of charging users high fees for both making and receiving calls. The move marks a milestone in China's reform of rates charged for telecom voice services. A government-set two-way charging scheme has long been practiced in China's telecom sector. This charges users for both making and receiving calls. Over recent years operators have been offering various packages that have lowered fees in most parts of the country. But, in Beijing subscribers pay more than anywhere else in the country. According to China Mobile's proposed packages approved by the Ministry of Information Industry (MII), the cuts will be very significant. For instance, subscribers will be able to choose a package under which he or she will pay only 10 yuan (US$1.25) to receive 500 minutes of mobile calls. That works out at just 0.02 yuan (0.25 US cents) per minute. The subscriber can also choose a package under which he or she pays 168 yuan (US$21) for 700 minutes of calls. This includes calls made and received. This works out to 0.24 yuan (3 US cents) per minute. According to Wang Lijian, a spokesman for MII, the department had approved applications from Beijing Mobile and Beijing Unicom to cut mobile telecom fees in the capital and the price cuts will be implemented in May.
"Golden Week" Spawns Profits Statistics published by the National Tourism Administration (NTA) on May 7 indicate that tourism at 116 Chinese scenic spots increased by 12.9 percent year-on-year during the May Day holiday, with ticket income increasing by 21.6 percent. Overall tourism revenue in 38 major Chinese cities during the seven-day holiday exceeded 20 billion yuan (US$2.5 billion), the NTA said. Beijing earned 3.92 billion yuan (US$490 million) in tourism revenue during last week's "Golden Week," up 12.2 percent over that of 2005. China's retail sales grew by 16 percent year-on-year during the holiday, largely driven by large retailers, the Ministry of Commerce said. Retail sales of consumer goods hit 278 billion yuan (US$34.75 billion) over the holiday period, according to statistics released by the ministry on May 8. The figure was nearly half the country's average monthly retail sales in the first quarter of this year. The seven-day holiday week has greatly enhanced China's tourism market despite disputes about the rationality of having so-called golden weeks. Some industry experts say the national holiday exerts too much pressure on transportation, catering and hotel and tourism infrastructures. China now has three "Golden Week" holidays in the year: the Spring Festival, International Labour Day, and National Day.
China Lifts Ban on Stock Sales China lifted a one-year ban on share sales, letting some publicly traded companies fund expansions in an economy that grew by 10.2 percent in the first quarter, China Daily reported on May 8. Companies must meet 34 criteria to be eligible to sell shares, including three consecutive years of profits and dividend payments equal to at least 20 percent of income, according to a statement posted yesterday on the China Securities Regulatory Commission Web site. Initial public offerings are still prohibited, it said. The rules cover additional share offerings, convertible bonds, share-purchase rights offerings and other types of securities but did not specifically mention IPOs. They took effect on May 8 after the markets reopened following a weeklong national holiday. New share issues would require regulatory approval and would likely not begin immediately. W3C China Office Opens in Capital The World Wide Web Consortium (W3C) has opened its China Office in Beijing for the purpose of inviting experts in China to join the international project of developing Web standards, Xinhua News Agency reported on May 4. The office is based at the School of Computer Science and Engineering of the Beijing Aeronautics and Astronautics University, where an opening ceremony for the office was held on April 27. In opening its office in Beijing, W3C is encouraging the Chinese industrial and academic communities to participate in the development of Web standards, W3C announced at its Web site. The W3C China Office is also expected to offer support to innovations of Chinese IT enterprises and internationalization of home-developed IT technologies, said Hu Jinpeng, vice-president of the Beijing Aeronautics and Astronautics University, who is also manager of the W3C China Office.
Foreign Exchange Rights Expanded Chinese citizens may now exchange up to US$20,000 or the equivalent in foreign currencies every year as of May 1, according to Xinhua News Agency. China's State Administration of Foreign Exchange (SAFE) made the news public via an administration policy paper published on its official Web site. The Chinese people can exchange foreign currencies within the US$20,000 quota with their own ID cards and explanation on the use of the foreign currency to the banks. For buyers who apply to exceed the quota, the banks will handle separate cases after checking their real usage, according to the SAFE. China's foreign reserve hit US$853.6 billion in February 2006, ranking first in the world.
Rate Increase Targets Real Estate Market The country’s booming real estate market is believed to be the main target of a recent interest rate in China. The industry relies heavily on the banking industry, Xinhua News Agency reported on April 28. Housing prices in 70 large- and medium-sized Chinese cities increased by an average of 5.5 percent during the first quarter of 2006, if compared to that of the same period in 2005, a recent National Development and Reform Commission report said. Prices in Dalian, a coastal city in Liaoning Province, grew by 14.9 percent, the highest of all cities. It was followed by Hohhot in Inner Mongolia, Shenzhen in Guangdong Province, Chengdu in Sichuan Province, and Qingdao in Shandong Province. The benchmark rate for one-year loans will rise to 5.85 percent from 5.58 percent, up 0.27 of a percentage point, the People's Bank of China announced on April 27 on its Web site. Yi Xianrong, a research fellow with the Financial Research Center of the Chinese Academy of Social Sciences, said the rate adjustment will be the most effective way to drive speculative capital out of an overheated real estate market.
Non-Beijingers buy Half of Capital’s Posh Houses More than half of the highest-priced homes sold in Beijing last year were bought by people from outside the capital. Thirteen percent of the city’s most expensive homes were bought by overseas buyers, the Chinese Academy of Social Sciences said in its annual real estate report on April 25. The Blue Book of Real Estate reports that about 52 percent of the city’s apartments and villas sold for an average of 11,467 yuan (US$1,416) per square metre or more and that they were purchased by people from outside the capital, local Chinese, overseas Chinese and foreigners. The average price per square metre for homes in Beijing was 6,725 yuan (US$830). Only 38.4 percent of the expensive houses sold in the capital last year went to Beijing residents. The remainder, 9.5 percent of the total, were bought by companies and institutions, the report said, although the total number of top-end residences sold was not revealed.
Lenovo and Microsoft Forge IPR Alliance Black, white and blue are not the usual colours for a ceremony to celebrate new business cooperative ventures in China, but these colours created a solemn ambience at the Microsoft headquarters in Redmond, Washington, in the United States when senior executives from Lenovo Group and Microsoft Corporation signed what Lenovo Chairman Yang Yuanqing called "the largest intellectual property agreement." Under the agreement, which involves about US$1.2 billion over the next 12 months, the two companies will join hands to promote the use and benefits of bona fide Microsoft software products in China and in 65 other countries and regions. The China component of the deal alone was valued at US$200 million. Microsoft and Lenovo decided to forge what they termed "a strategic cooperation" to coincide with President Hu Jintao's official visit to the United States in April. The two companies decided on the deal after a six month trial of "a value-added software programme," during which Lenovo pre-installed genuine Microsoft Windows operating systems on most Lenovo product lines. Oversight Strengthened for Policy Banks, Institutions The China Banking Regulatory Commission (CBRC) has set up a new department to oversee the country's three policy banks, four asset management companies and the country’s vast postal savings network, Xinhua News Agency reported on April 18. In a statement, the CBRC said the initiative will provide for a more independent and improved supervision of the banking industry. CBRC was spun off from the People's Bank of China, the central bank, three years ago. It already regulates the big four State commercial banks and 13 smaller national shareholder banks. The new financial institutions now under the CBRC's purview include the China Development Bank, the Agricultural Development Bank of China, The Export-Import Bank of China and the China Postal Savings offices. Their combined assets were 11.4 percent of the industry's total by the end of 2005. New Share Issues Allowed China on April 17 announced the resumption of capital-raising by companies on its two stock markets after an 11-month suspension and said it would soon approve new initial public offerings. The first new share issuance by a listed company is scheduled for the middle of May and the first listing will come "a month or two after that," sources said. About a dozen other firms have been told by the China Securities Regulatory Commission (CSRC) to be prepared to follow. The sources said the first listing candidate has not been identified but added that it would not be a company with a Hong Kong listing. Officials said they are looking for "another Baidu" with the potential for a listing performance that might match the spectacular NASDAQ debut of Baidu, the Chinese-language Internet search engine. The first new listing will likely find its way to the Shenzhen exchange. Gu Ge = Google When Google Incorporated formally opened its engineering centre in Beijing on April 13, the Internet search giant also gave itself a Chinese name. To make it easier for Chinese people to use its services and to capture more users, US-based Google said it would also go by the name Gu Ge, which means "song of the harvest of grain." The new name, a first for Google in any non-English-language market, is expected to give it a boost in China's Web search market. The centre has recruited about 80 engineering graduates in China, 15 from Google's headquarters in the Silicon Valley, Overseas Investment Encouraged China said it will let companies and individuals make investments overseas for the first time, a policy shift that could temporarily ease strong US pressure on Beijing to revalue its currency, the renminbi (yuan). The new investment rules from the State Administration of Foreign Exchange allow professionals to buy overseas stocks and to make investments outside of China. The rules allow Chinese individuals to buy at least $20,000 in foreign currency each year, while companies will be able to hold more in foreign currencies than is currently allowed. The changes take effect May 1. Foreign-exchange analysts said the move could represent the latest step in a gradual move by China toward a more open, market-based currency. It follows Beijing's decision last July to revalue the yuan and let it trade against a basket of currencies and another move in January that permitted foreign banks to trade yuan with each other, rather than using the government as an intermediary.
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