U.S Commercial Service -- American Embassy, Beijing
Vol. 2 No. 124
The China Commercial Brief is a biweekly publication featuring summaries of developments in China's various commercial sectors, tips on doing business in China, and U.S. Embassy news. This publication is free of charge; please forward it to your colleagues and friends who are interested in China.
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Editor: David Snodgrass
Contributors: CS Chengdu, Cindy Wang, Michael Mei, Peining Zhao, Xianmin Xi
News Briefs
In addition to the article summaries provided by CS Beijing, our four China branch offices - Chengdu, Guangzhou, Shanghai, and Shenyang - submit summaries of commercial articles from their local press to the CCB on a rotating schedule. This week we are pleased to feature a contribution from our Chengdu post.
1. China's First Environmentally-Friendly Road To Be Built In Sichuan
2. Beijing's Natural Gas Consumption To Triple By 2010
3. Three Gorges Power Plant Founded
4. Sino-U.S. Trade To Reach $92 Billion In 2002
5. Cheng-Nan Highway To Open To Traffic
6. China's State Council Issues Action Plan for Developing Software Industry
1. China's First Environmentally-Friendly Road To Be Built In Sichuan
According to the Sichuan Transportation Bureau, construction recently began on the first environmentally-friendly road in China. It will run from Jiuzhai-Huanglong Airport to the entrance of Jiuzhaigou, a famous tourism site in Sichuan. The Jiuzhai-Huanglong Road is 91 kilometers long and will have a total investment of RMB 3 billion (USD 363 million). The Jiuzhai-Huanglong Road is being built as a solution for the potentially large flow of visitors to the area after the Jiu-Huang Airport is opened to the public in 2003. This road will be the first environmentally-friendly road model in China, combining good road construction techniques with ecological protection. The road is expected to be completed along with the Jiu-Huang Airport in August 2003.
(Source: Sichuan Economic Daily, 11/21/2002 - Translated by Chengdu Post)
2. Beijing's Natural Gas Consumption To Triple By 2010
In order to ensure implementation of the strategies for the Olympic Games put forward in the “Program of Beijing Olympic Games Actions,” Beijing City Gas Group Company revealed that by 2005 the supply of natural gas in Beijing will reach 4 billion cubic meters, and will exceed 6 billion cubic meters by 2010.
At the end of last year, the volume of natural gas consumed in Beijing reached 1.448 billion cubic meters, and hit 1.8 billion cubic meters this year. According to the strategies worked out by Beijing City Gas Group Company, in several years, Beijing will complete construction of the second line of gas pipes for transmission of natural gas to Beijing from Shaanxi Province. The underground gas reservoirs will also be broadened, and the utilization of natural gas expanded. Efforts will be made to extend gas service to the suburbs far outside the city, and construction of vehicle-use natural gas and vehicle-use liquefied gas stations should also accelerate.
By the end of 2000, natural gas consumption (if measured by volume) reached 1.097 billion cubic meters in Beijing, putting the city in first place among large cities nationwide in terms of volume consumed. By the end of last year, natural gas customers in the city as a whole totaled 1.7 million households, while customers of man-made coal gas totaled 0.21 million households, and customers of liquefied gas reached 1.23 million households. The construction of more than 180 kilometers of liquefied gas pipe lines has just been completed in Beijing.
In recent years, gas boilers substituted for coal boilers have produced 9300t/h of energy capacity, converting to 83 million square meters of heated area. At the same time, the construction of complete gas transmission engineering facilities from Shaanxi Province to Beijing is being sped up. Furthermore, five natural gas filling parent stations for cars have been built, and over 1700 large gas-fueled buses have hit the streets in Beijing, greatly changing the fuel consumption makeup in Beijing. Natural gas as a proportion of all energy sources increased to 8.8% from the previous 0.4%.
(Source: China Petrochemical News, 11/12/2002 - Translated by Cindy Wang)
3. Three Gorges Power Plant Founded
The world’s largest hydropower plant, the Three Gorges Power Plant, was launched recently in Yichang City, Hubei Province.
According to official sources, the plant will be in charge of the operation and maintenance of the 26 large generating units of the Three Gorges project, and its annual power output will top 84.6 billion kWh.
The plant is affiliated with the China Yangtze Power Co. Ltd., who also owns the Gezhouba Power Plant, which has an annual power output reaching 13.8 billion kWh. After the first generating unit of the Three Gorges project goes into operation in 2003, the company will seek an opportunity for the newly-established plant to go public.
According to the construction plan for the Three Gorges project, the Three Gorges Power Plant will begin generating electricity in October 2003. Two 700,000-kW units will go into operation in October and December 2003 respectively and generate a total of 5.5 billion kWh in the year. 3-4 additional generating units will go into operation every year during the 2004-2009 period.
(Source: China Electric Power, 11/2002 - Translated by Michael Mei)
4. Sino-U.S. Trade To Reach $92 Billion In 2002
Two-way trade between China and the United States may reach 92 billion U.S. dollars this year if it continues to grow at the current rate of 14.6 percent, trade analysts say.
China-U.S. trade from January to August this year totaled 60.2 billion U.S. dollars, up 14.6 percent. While China's exports to the U.S. increased 22.7 percent to reach 43 billion U.S. dollars worth of goods, China's imports of U.S. goods decreased 1.7 percent to 17.18 billion U.S. dollars.
China's exports to the U.S. were mainly machinery and electronic products, textile products, toys, footwear, furniture, base metal, plastic and rubber products, and fur and leather. U.S. exports to China were primarily machinery, electronic products, chemicals, medical equipment and medicine, optical goods and aircraft.
In addition, China's strong economic growth and its reduction of tariffs following its entry into the World Trade Organization, together with the U.S. economic recovery were the main factors leading to the trade growth. The U.S. is now China's second largest trading partner after Japan.
(Source: China Business Time, 11/25/2002 - Translated by Peining Zhao)
5. Cheng-Nan Highway To Open To Traffic
The Cheng-Nan (Chengdu – Nancong) Highway is one section of the main line of the Shanghai-Chengdu Master National Road. It is the longest highway project with the largest investment and highest construction standards at present in Sichuan Province. The Cheng-Nan Highway is also the first key highway project for Sichuan that has utilized Asian Development Bank funding and adopted international bidding standards and supervision systems. The project has a total investment of RMB 63.619 billion (USD 2.25 billion). Ground breaking took place on November 1, 1999 and is expected to be completed by December 2002. The total length of the Cheng-Nan Highway is 214 kilometers. Upon completion, the driving time from Chengdu to Nancong will be reduced from 6 hours to 2 hours.
(Source: Chengdu Evening News, 11/27/2002 - Translated by Chengdu Post)
6. China's State Council Issues Action Plan for Developing Software Industry
In its "Action Plan for Invigorating the Software Industry" issued recently, the State Council of China has set the following targets for the development of China's software industry: 1) sales volume to reach RMB 250 billion; and 2) domestic software and service to account for 60% of the total market share by 2005.
The "Action Plan" is a general guiding document formulated in reference to new software industry development both at home and overseas, and in recognition of the urgent needs of domestic software enterprises. The plan clarified the guiding principles for development of the software industry in China. Under the principle of "pushing forward industrialization through informatization," the plan aims to: accurately define the roles of the government, enterprises, and the market; strive to meet the needs of the domestic market; actively promote exports by utilizing the domestic and overseas markets and resources expand the industry scale; and enhance the international competitiveness of China's software industry.
The plan sets several development targets for 2005 which include the development of a number of internationally- competitive software products, several key software enterprises with sales value exceeding RMB 5 billion, a talent pool of 800,000 software technical personnel with optimized staff composition, and software products and systems with proprietary intellectual property rights in critical sectors of the national economy and social development.
According to reports, China's software industry sales reached RMB 7.5 billion, and exports totaled $750 million in 2001, up 34.3% and 87.5% over the figures for 2001. It is estimated that software sales growth will reach 30% to 35% in the next few years, and the growth rate of exports will hit 50% to 60%. By 2005, the sales value and export value for software are expected to reach RMB 250 billion and $5 billion respectively.
(Sources: People's Post, 12/4/2002 - Translated by Xianmin Xi)
Consulate News: Chengdu
In keeping with our goal of making the CCB a more integrated publication, our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit consulate news to the CCB on a rotating schedule. This week, we are pleased to feature a contribution from CS Chengdu:
Hawaii Delegation Seeks Business Opportunities in Chengdu: A delegation from Hawaii, headed by Mr. Richard Bahar, Business Development Manager, Business Development and Marketing Division, State of Hawaii, visited Chengdu in late November to investigate business opportunities in Chengdu and Sichuan Province. On November 26, Chengdu PCO Helen Peterson arranged for the delegation to meet with Chengdu Consul General David Bleyle, Public Affairs Officer John Louton, Visa Section Chief Paul Simon, Commercial Representatives Rose Nickel and Misha Cao, in addition to Commercial Assistant Chen Ling. The Hawaii delegation was interested in exploring opportunities in the education sector, including distance education, tourism, and architecture, as well as possible future cooperation with Chengdu and Sichuan through cultural and educational programs.
Taking advantage of a newly-received enquiry, Post arranged for Mr. Bahar to visit the China Council for the Promotion of International Trade (CCPIT) Sichuan on November 29 to meet with Mr. Zuo Jiu and Mr. Yi Yang, Director and Deputy Director, respectively, of the Department of International Cooperation to discuss a proposed corporate training program on venture capital and the subcontracting of software development. The venture capital training would be conducted in Chengdu by visiting lecturers and would be followed by a visit to the U.S. by participants to meet with venture capital companies. Mr. Bahar expressed strong interest in the proposal, and the training program was discussed at length during the meeting. Sichuan CCPIT also expressed interest in having project-oriented young interns from U.S. MBA programs work in Sichuan Chinese enterprises and offered to arrange for room and board for the interns. Additionally, Mr. Yi spoke about Sichuan's competitive advantages and provided a general introduction to the province. CR Rose Nickel accompanied Mr. Bahar to the meeting and participated in the discussions. An IMI will follow, reporting on the proposed venture capital training program.
Ping Ping's Picks
Finding out what you need to know is often difficult to do in China. To make the process easier, we feature a different source of commercial information in this section every week.
China Statistical Yearbook 2002 is an annual statistics publication. It provides the most comprehensive data at the national level and at the levels of province, autonomous region, and municipality, reflecting various aspects of China's social and economic development.
This book contains 24 parts, which include:
Divisions of Administrative Area and Natural Resources
National Accounts
Employment and Wages
Investment in Fixed Assets
Production and Consumption of Energy
Government Finance
Price Indices
To get more information about this book, please contact the publisher, National Bureau of Statistics of China, at Tel: (86-10) 6326-2276.
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Jenny (Pingping) Xie is the Information Guru for CS Beijing.
DISCLAIMER: CS China does not guarantee the veracity of the original sources of our news summaries. While we do our best to report accurate and timely articles and news sources, you should always check the source for further information.
The China Commercial Brief is a free newsletter published by the U.S. Embassy- Beijing.
If you have been forwarded this newsletter by a friend, you may subscribe by sending a blank email to join-china-commercial-brief@list.xianzai.com .
If you have any questions or comments about this publication, please send an email to David.Snodgrass@mail.doc.gov .
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INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2002. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.