Related stories

Official: Bridge Linking Beijing and Foreign Business Communities Foreign Banks Granted More Freedom in Currency Business Sino-UK business website launched in London New Beijing Business Database Launched btmbeijing.com 2 Beijing Business Incubators

Brief

Bank of China Listed in Hong Kong

The Bank of China Limited (BOC) was listed on the main board of the Hong Kong Exchange and Clearing Limited (HKEx), and the trading of the bank's H shares began on June 1. BOC shares closed at HK$3.40 (slightly less than 44 US cents) per share with a traded volume of US$2.56 billion. The traded volume accounted for 37 percent of the Hong Kong stock market's total traded volume, setting a new record for the debut of a newly listed company. BOC is the second listed bank among the four biggest commercial banks on the Chinese mainland, and the bank's initial public offering was biggest of its kind in the world in six years. The debut share price was HK$3.15 (40 US cents), 6.8 percent higher than the initial public offering (IPO) price of HK$2.95 (38 US cents), and the IPO raised US$9.7 billion. BOC Chairman Xiao Gang, at the bank's listing ceremony at the HKEx said that the BOC's IPO is one of the most successful IPO programmes in the international capital market, a sign of international investors' confidence in China's long-term economic prosperity and acceptance of the bank's century-old brand.

China, Arab States to Hold First Oil Meeting

Oil will be the topic of a high-level discussion between China and various Arab states sometime between 2006 and 2008, according to an action plan signed on June 1 by Chinese Foreign Minister Li Zhaoxing and League of Arab States Secretary-General Amr Mahmoud Moussa. The signing came during the second ministerial meeting of the China-Arab Cooperation Forum. The two sides vowed to establish a dialogue to improve their energy cooperation. Under the plan, China and the Arabian countries agree to increase visits and dialogue and to coordinate certain of their activities at the United Nations and in other international organizations. The plan says China and the Arab countries will encourage their enterprises to enhance investment, establish joint ventures and to engage in cooperative exchanges and technology transfers in the energy sector. Arabian countries are China's largest crude oil suppliers. China imported 55.36 million tons of crude oil from Arabian countries in 2005, 43.7 percent of its total oil imports.

New Electric Train Service to Beijing

Fast and clean electrically powered trains will soon operate between Shanghai, Beijing and Hangzhou with a railway network upgrade and conversion to electricity that is nearing completion, according to China Daily. The new trains are scheduled to begin operating in July and will be like metro trains, except that locomotives will be much more powerful and faster, the Shanghai Railway Administration Bureau said on June 1. The current top speed of existing diesel trains is 160 kilometres per hour. The top speed of the new trains was not given.

Tall Youngsters Get Bus Ticket Break

The Beijing Municipal Government has revised its criteria for children who are not required to pay for public transport. It seems some youngsters have "outgrown" their right to free bus boarding. Any child 1.2 metres tall or below is now eligible to ride free, up from the 1.1-metre standard set in 1949. Beijing Municipal Children's Studies Institute statistics indicate that Chinese children have grown by 2.3-3 centimetres every decade during the past half-century. Because of their growth, China's 360 million children have begun to be penalized when trying to board a bus. Shortly after the founding of new China in 1949, the central government granted this entitlement to children 7 years old or 1.1 metres tall or less, along with free entries to leisure activities and free school lunches.

Taxi Fares Rise to 2 Yuan

Beijing's first taxi fare hike in six years came on May 20, raising the price per kilometre after the four-kilometre base (flag fall) from 1.6 yuan (20 US cents) to 2 yuan (25 US cents), China Daily reported. The base rate will remain at 10 yuan (US$1.25). The process of switching to the new price will continue until June 30 during which time the taxi companies will change fare devices and price labels. Taxis featuring the 1.6-yuan fare window tag will continue to operate under the old system. The 3,000 smaller taxis that charge 1.2 yuan (15 US cents) per extra kilometre will be phased out by the end of this year. The Beijing Municipal Commission of Development and Reform announced the hike on May 19 after a public hearing in April. The fare hike is meant to offset the effect of fuel price increases of up to 50 percent since 2000. Taxi fares in Beijing have remained unchanged since 2000, but oil prices have increased to 4.65 yuan (57 US cents) per litre from 3.2 yuan (40 US cents) per litre in late 2000.

Country's Software Industry Overtakes India and South Korea

China's software industry has overtaken that of India and South Korea, according to statistics released at the 28th International Conference on Software Engineering. China's software industry has developed rapidly in recent years; its output value volume increased to 390 billion yuan (US$48.6 billion) in 2005, up from 59.3 billion yuan (US$7.41 billion) in 2000; its global market share has risen to 3.55 percent. Beijing's media reported that China's share in the international software market increased synchronously. The country's software export value was only US$400 million in 2000, but surged to US$3.59 billion in 2005. Industry experts attribute the growth to an increasingly close convergence of policies, production, education and research that has sparked the high-speed development of China's software industry in recent years. As a group, available software professionals in China are increasing by about 380,000 per year.

Rising Drug Prices Curbed

China's drug producers are now required to print recommended retail prices on their packaging, a move that marks just one of the country's efforts to halt soaring drug and medical service prices, according to the Xinhua News Agency. The new policy was issued on May 31 in a circular issued by the National Development and Reform Commission, the Ministry of Health and six other governmental departments. The circular says the government will readjust fixed drug prices and will tighten its supervision of prices determined by the market. In an experimental measure, some of the drugs will have their prices fixed by the government at the factory gate. The government will also seek to readjust the prices for medical services and standardize the services of hospitals. Major public hospitals will be banned from selling drugs at prices more than 15 percent higher than their purchase prices. Soaring drug and medical service prices have become a major social problem in China in recent years. The government has made efforts to improve the situation, but with little success.

Innovation Sought in Sci-Tech Programme

A national meeting was held on May 29 to map out plans to implement the country's long- and medium-term programme for scientific and technological development; the focus will be on technological innovation. The meeting, chaired by Premier Wen Jiabao, outlined eight tasks in implementing the Outline of the National Programme for Long- and Medium-Term Scientific and Technological Development that was issued by the State Council in February. Redoubled efforts are expected to enhance the country's innovative capability; the goal is to improve the competitiveness of key industries, according to a report of the meeting. The government will play a guiding role in coordinating work of different sectors. Some at the meeting said more attention should be given to the role of experts in implementing the Outline and called for the establishment of a mechanism for the sustainable development of science and technology. The country supports the combined efforts of enterprises, research institutions and universities in the development of new research projects and encourages cooperation between domestic research bodies and their counterparts in other countries.

Recycling Economy Law Planning Begins

China's first recycling economy law is expected to be submitted to the National People's Congress (NPC) Standing Committee for deliberation in August 2007, according to Xinhua News Agency. Sun Youhai, an official with the NPC Environmental and Resources Protection Committee, on May 26 announced the target at a forum on the growth of China's recycling economy. The draft law will be presented to the draft team for discussion in July 2006. A law containing guidelines only is not deemed adequate because the growth of the recycling economy requires joint efforts of the government, enterprises and individual citizens, he said. It involves issues of importance to enterprises and individual consumer behaviour. China is creating new legislation concerning energy. The law on renewable energy was put into operation this year. Creators of the country's Energy Law, the constitution for all laws in the energy field, began soliciting public opinion in April.

Capital Unveils Plans for "Green" Games

The upcoming Beijing 2008 Olympic Games will be a "green" Games thanks to the use of renewable resources, according to Tian Maijiu, vice chairman of the Standing Committee of Beijing Municipal People's Congress. Tian said wind power will generate 20 percent of the electrical supply for Olympic venues in 2008, while terrestrial heat will provide central heating and air conditioning for a 400,000-square-metre area. Between 80 percent and 90 percent of the street lamps will use solar power, which will also heat 90 percent of bath water. Olympic venues and facilities will make full use of new energy sources, Tian said while speaking at a seminar on China's circular economy. Solar power, biomass and wind power development will be the three main projects in the city's rural ecological park. Two refuse incineration plants will process about 600,000 tons of garbage, while generating 250 million kilowatts of electricity a year. The two comprehensive refuse-processing plants will be model projects to demonstrate the benefits of processing refuse, such as the production of methane gas. The city will build a series of large recycling projects to help save energy and for environmental protection purposes. Two large refuse incineration plants, two comprehensive refuse-processing plants and one disposal centre for dangerous wastes are under construction.

President Calls for IPR Improvements

China should work out a national intellectual property rights (IPR) strategy backed by a sound legal and policy system, Chinese President Hu Jintao said on May 24. China should cultivate its own copyrighted and patented brands that are IPR protected, improve its IPR legal system to meet international IPR protection requirements and crack down on IPR infringements, said Hu at the meeting. "Only by doing so can China improve its innovation capability, adapt to the socialist market economy and the international environment." He said that through its IPR policies and laws, China must find a balance between protecting its own scientific innovations and legally borrowing science and technology from others. Hu said IPR protection is in the public interest and will benefit China's long-term development. Participants in the Political Bureau of the Central Committee of the Communist Party of China (CPC) meeting mainly discussed international IPR protection and the development of China's IPR legal and policy system.

Air China Flies to Star Alliance

The Chinese flag carrier, Air China Limited, signed a memorandum with Star Alliance on May 22, taking its first step toward joining the Star Alliance group of airlines, according to Xinhua News Agency. Li Jiaxiang, chairman of Air China Limited, said the agreement will be a win-win result for the two sides, noting that no aviation company could seek a vast market without such cooperation. With Air China's enrolment, the Star Alliance will gain access to China's high-potential aviation market, the fastest growing in the world, Li said, adding that Air China Limited will expand its flights to more cities worldwide. Domestic passengers in China will benefit greatly from the deal; they will be able to travel to every destination served by the alliance and cut their travel flying times.

Nokia Expands Presence in Beijing

Nokia, the world largest cell phone maker, on May 23 began construction of its new China Campus, the future home of its China headquarters, its research and development (R&D) centre and mobile-phone manufacturing base in Beijing, China Daily reported. The Nokia project involves an investment of 450 million yuan (US$56.25 million). After opening in the second half of 2007, the campus will serve as a base for more than 1,500 Nokia employees engaged in R&D, sales, marketing, logistics, sourcing and manufacturing. At the foundation-laying ceremony, Jorma Ollila, chairman of Nokia, said that the campus will help integrate all of the company's operations and provide new opportunities for exchanges of information and ideas.

ICBC, Alibaba Sign Online Deal

The Industrial and Commercial Bank of China (ICBC) and the Alibaba Group teamed up on May 23 to promote the development of e-commerce and e-banking in China, according to China Daily. The strategic co-operation deal was signed in Hangzhou, the capital city of East China's Zhejiang Province. The new deal is an expansion of the companies' existing online payment partnership that was formed a year ago. From January to April, Alipay, or Zhifubao, a third-party online payment company under the Alibaba Group, dealt in 6.29 million transactions with a total trading value of 1.12 billion yuan (US$140 million). The transactions in the four months almost equalled the total transactions in 2005, an indication of the rapid growth in the online business. More than 40 percent of all online transactions were made through ICBC accounts. In support of online payments, Alipay will now accept the U-key digital certificate issued by ICBC, which is expected to help control risks and better serve clients from both groups. Alipay has more than 17 million clients, with a daily trading volume exceeding 30 million yuan (US$3.75 million).

Nineteen Cooperation Documents Signed

China and Germany signed 19 documents concerning bilateral cooperation on May 22 in Beijing, with Premier Wen Jiabao and visiting German Chancellor Angela Merkel attending the signing ceremony, China Daily reported. The documents were mainly concerned with fields such as railway technologies, financial cooperation, high-tech dialogues, telecommunications, energy, culture and sports. The two sides also signed a memorandum of understanding concerning the protection of intellectual property in textile industry. The documents were signed at the Great Hall of the People after the talks between Wen and Merkel. At the invitation of Premier Wen, Merkel arrived in Beijing on the night of May 21, kicking off an official visit that ended on May 23. It was Merkel's first visit to China since she came to power in November 2005. During her stay in Shanghai, the last leg of her China tour, Merkel took a train trip along the city's maglev line to a terminal at the Pudong International Airport. The Shanghai maglev train project resulted from China and Germany's technological cooperation.

FAW Unveils Benteng Sedan

The mainland's first domestically designed middle to high-class sedan should hit the market by July, Xinhua News Agency reported. First Automotive Works (FAW) Group, China's largest automaker, unveiled a new mid-to-high class sedan at the Hangzhou Auto Show on May 18. The car is called the Benteng, which means "galloping forward" in Chinese. Benteng will be powered by 2.3-litre and 2-litre engines. It was developed on the basis of the Mazda 6 with a great deal of changes of to its body, safety equipment and interior decoration. FAW spent three years making the Mazda 6. The Changchun-based company plans to sell 10,000 units this year in China, with prices expected to range from 200,000 yuan (US$25,000) to 250,000 yuan (US$31,170). According to An Dewu, deputy general manager of FAW, Benteng integrates FAW's 50 years of experience in making cars and more than 15 years of successful cooperation with foreign companies. Other competitive models in this market include Volkswagen's Passat, Honda's Accord, Toyota's Teana, and the Royaum from General Motors Corporation.

Water Waste Could Bring Fines

Extensive checks are being conducted in luxury sectors in Beijing, such as golf courses, saunas and car washing services, to crack down on water wastage, China Daily reported. The initiative, which began on May 15, comes in the midst of the city's worst drought in seven years. The checks are designed to calculate water consumption in these sectors, so that authorities can determine rational uses of water, according to Yu Yaping, a spokesman with the Beijing Water Authority. Yu said the authority could impose fines of up to 10,000 yuan (US$1,250) on enterprises and public institutions that are deemed to be wasting water. Enterprises and public institutions in luxury sectors will face additional charges for supplies if their annual consumption exceeds 100,000 tons. Enterprises and public institutions are being urged to replace outdated facilities that do little to conserve water by the end of June. Retail outlets will also be banned from selling outdated water-related equipment.

Disney, Shanda Seek Online Gamers

The Walt Disney Internet Group and Shanda Interactive Entertainment announced on May 24 that they would bring Disney characters to China's booming online games industry, China Daily reported. Shanda will develop, distribute and operate an online game based on the magical world of Disney, featuring some of its most popular animated characters, according to the agreement. Targeting female online gamers in China, the game will be available in open beta, or a preview stage, in the spring of 2007. Shanda Spokesperson Zhuge Hui said the development process will be completed by the end of the year. China's online games industry has a large and loyal user-base of mainly young males. Shanda claims that in the first quarter of 2006, it had 1.35 million online gamers, on average; more than 30 percent were described as casual games players. As one of the largest operators of online games in China, Shanda operates 12 online games, including seven role-play and five casual games.