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News2007/11/15
China to Provide Basic Medical Care for All Rural Residents by 2010
The Chinese Government has promised that basic medical and health care will be available to all rural residents by 2010. The Ministry of Health made the promise on November 2 at a two-day forum it organized jointly by the World Health Organization (WHO). The government will furnish the bulk of the system’s funding and will also encourage other public bodies and individuals to raise funds for the system. The ministry said the government will increase its spending in rural and remote areas. A three-level medical and health-care system involving counties, townships and villages will be established nationwide. The government will ensure there is one public hospital for each township and one clinic for each village. It promised to upgrade the medical care infrastructure in rural areas in step with economic development. The government will also train medical staff to work in rural areas and build a long-term mechanism with urban areas supporting rural areas.
Five Pesticides to be Banned
The production of five toxic pesticides will soon be banned to ensure the safety of agricultural products, a senior official said on October 29. Gao Hongbin, a vice-minister of agriculture, made the announcement at a media briefing on food safety and product quality. Since the country has banned the use of the five pesticides, including methamidophos, in agricultural production, the ministry plans to forbid all factories from producing such pesticides, Gao said. Gao said the ministry is also considering a regulation concerning the labelling of pesticides to make it clearer and easier to read. The ministry reported that it has revoked the licenses of seven enterprises for production of toxic pesticides and confiscated 479 tons of illegal pesticides during the campaign.
Development of New-Energy Automobiles Encouraged
A new regulation regarding the qualifications of manufacturers of automobiles powered by new-energy sources was promulgated on November 1 by the National Development and Reform Commission (NDRC), after seven months of public discussion. The move reportedly marks an advance in the development of automobiles that can operate on alternative energy sources, because of concerns about future energy supplies, their cost and the need for better energy conservation and environmental protection nationwide. New-energy automobiles were defined by the regulation as hybrid cars, battery electric vehicles (BEV), fuel cell electric vehicles (FCEV), hydrogen-fuelled vehicles and similar vehicles. Passage of the regulation coincided with the announcement of a sharp gasoline price increase by the NDRC. The prices of gasoline, diesel oil and aviation kerosene increased by 500 yuan (US$65) per ton, a rise of almost 10 percent, to reduce the gap between soaring international crude prices and state-set domestic oil prices. The document said China would accelerate the research, development and production of new energy vehicles step by step. Auto enterprises applying to manufacture vehicles powered by new energies should have adequate research, production and after-sales service capacities and need to ensure the reliability of the autos, it said. Special testing institutions will be entrusted to supervise the quality of the vehicles powered by new energies, according to the regulation.
Profits Nearly Double for State-Owned Property Companies
China's Ministry of Finance reported a startling 95.5 percent increase in State-owned real estate sector profits during the first nine months of 2007, as the country's housing prices kept soaring in major cities despite massive housing development. The extent of the industry's profits was undisclosed, but a leading State-owned property company, Poly Real Estate Group Corporation, reported revenues of 39 billion yuan (US$5.1 billion) and net gains in profits of 83.27 percent to 562 million yuan (US$73.1million) in the first nine months in its quarterly report. This number pales in comparison to the private property company, China Vanke Corporation Limited, which collected 1.8 billion yuan (US$234 million) in net profits during the first half of 2007. Surging profits are a symptom of the continuing boom in the property market. The State Bureau of Statistics reported an increase of 8.2 percent increase in housing prices in 70 large- and medium-sized Chinese cities in August, based on figures from the same period in 2006. Other State-owned real estate developers enjoying the property boom include the China National Real Estate Development Group Corporation, China OCT, COFCO Property. State-owned construction companies also flourished during the first nine months of 2007, with profits rising by more than 90 percent. The profits of State-owned steel, automobile and oil and chemical companies grew by about 60 percent. However, State-owned coal enterprises generated profits of only 24.4 percent over the same period in 2006.
PetroChina Becomes World's Largest Listed Company
PetroChina, China's largest oil and gas producer, replaced Exxon Mobil as the world's largest listed company by market value on October 5, as its share price surged 163 percent to close at 43.96 yuan (US$5.71) on its first day of trading on the Shanghai Stock Exchange. The company's share price opened at 48.6 yuan (US$6.32) on October 5, almost tripling its IPO (initial public offering) price of 16.7 yuan (US$2.17) per share. PetroChina raised 66.8 billion yuan (US$8.9 billion) in Shanghai by selling four billion A shares, or 2.18 percent of its expanded share capital, in the world's biggest IPO in 2007. The company's market value on the Shanghai bourse swelled to above the US$1 trillion mark, past Exxon Mobil, which is valued at US$487.7 billion. PetroChina was the first of the country's three petrochemical giants, to be listed on an overseas stock market. The company's listing will help drain excess liquidity on the domestic market and add weight to industrial blue chips, that, in turn, would help maintain the stability of the domestic capital market, said a report released by CITIC Securities.
Banks, Insurers Eye Beijing—Shanghai High-Speed Railway
Chinese banks and insurance companies have plans to invest in a high-speed railway linking Beijing and Shanghai, according to the 21st Century Economic Report. The Bank of China (BOC), the Industrial and Commercial Bank of China (ICBC) and the Construction Bank of China (CBC) all plan to invest 10 billion yuan (US$1.34 billion) in the project. A final decision has yet to be made on how to invest in the project and how much the BOC will invest, said BOC spokesman Wang Zhaowen, who added that the bank will invest in its own name instead of via its subsidiaries. Ping An Insurance (Group) Company of China Limited, China Life Insurance Company Limited and the People's Insurance Company of China, are also planning to bid. The State Council has approved a feasibility report on the planned project, yet the date for starting awaits further approval. Construction of the 1,318ñkilometre Beijing—Shanghai high-speed railway is scheduled to begin within 2007, with operations beginning in 2010, the Ministry of Railways said earlier. Investment in the project is expected to total about 130 billion yuan (US$16.9 billion).
CSRC: Stock Index Futures Ready to Take off
Shang Fulin, chairman of the China Securities Regulatory Commission (CSRC), said on October 27 that the country has by and large completed systemic and technical preparations for the launch of its first stock index futures market. "The commission would continue with final preparations before officially introducing the stock index futures market," Shang said at the 2007 China Financial Derivatives Conference held in Beijing. "The development of financial derivatives can improve the country's financial efficiency and help the country better handle financial risks," Cheng Siwei, vice-chairman of the Standing Committee of the National People's Congress, told the conference. He said the introduction of stock index futures would help ensure smooth development of China's stock market by enabling investors to profit when anticipating share price plunges. However, the initial threshold for investment in the stock index futures will likely be set at a relatively high level to guard against irrational investment until the market matures, Cheng said.
Air China to Issue 400 Million Shares
China's flag carrier, Air China, announced plans to issue up to 400 million A-shares, 5.1 percent of its total, on November 1; the company aims to raise funds to purchase aircraft and replenish the company's working capital. The company intends to use proceeds from the offering to finance the acquisition of 15 Boeing 787 aircraft, 24 Airbus 320 series aircraft and 15 Boeing 737 aircraft. It will also spend up to 1.5 billion yuan (US$195 million) to replenish its working capital. As the Olympic Games is drawing near, China's civil aviation industry has embraced the opportunity to expand its business. In the first three quarters of this year, the country's airlines reported 13.72 billion yuan (US$1.78 billion) in combined profits, more than double the year-earlier level. The Investor Relations Office of Air China said that the company is awaiting approval of the new share offering from its shareholders and relevant authorities. The company has not decided who will serve as the main underwriters of this issue, said the office.
Tunnel for New West-to-East Gas Pipeline Completed
Workers completed a tunnel under China's Yangtze River on October 29, through which a major gas pipeline will run, connecting gas fields in Sichuan Province in Southwest China to Shanghai Municipality in East China . With a diameter of 3.08 metres and a length of 1,405 metres, the tunnel was bored about 20 metres beneath the riverbed, said Liu Juzheng, head of the The 2,203-kilometre (km) pipeline, with the mainline extending In addition to Shanghai, the pipeline is expected to channel 12 billion cubic metres of natural gas annually from The tunnel, which took 325 days to finish, is the first of five to cross under the Yangtze, which originates in Qinghai Province and empties into the East China Sea near Shanghai. With an investment of 62.7 billion yuan (US$8.25 billion), the pipeline is scheduled for completion in late 2010.
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