U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 129
The China Commercial Brief is a biweekly publication including summaries about 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
Contributing Specialists: CS Shenyang, Shen Yan, Michael Wang, Cindy Wang, Cao Yue, Qiu Jing
News Briefs
In the interests of providing news from all over China, 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, in addition to the five article summaries provided by CS Beijing.
1. Liaohe River Basin Sewage Treatment Improved (CS Shenyang)
2. Chinese Consumer Index Ranking First In Asia Pacific
3. Universal Service Fund May Open up Market for Lower-cost Telecom Products
4. A Review of China's Oil Market and Outlook for 2003
5. China - The Largest Pulp Importer in the World
6. Foreign Investment allowed in distribution but not in the editing business
1. Liaohe River Basin Sewage Treatment Improved
Liaoning will intensify the construction and operation of sewage facilities in 2003, aiming to improve the sewage treatment rate from the current 41.6% to 75% in the Liaohe River Basin.
According to Du Qiugen, Director of Liaoning Environmental Protection Bureau, Liaoning has closed eight pulp and paper making plants with production capacity of 10,000 tons and completed 77 industrial pollution source treatment projects in the Basin by the end of 2002. Over 90% of key slaughterhouses in the Basin took actions to treat sewage discharged. The discharge from the enterprises in the Liaohe River Basin reached the set standard.
Compared with 1997, the total pollutants discharged in the Basin reduced by 30%. The biological species began to increase. Fish, shrimp and crab appear again in some river sections, which was never seen after 1982.
Liaoning invested a total of RMB7 billion (USD847 million) to build eleven new sewage treatment facilities and five new solid waste treatment facilities in Liaohe River Basin in the past five years.
Liaohe River is one of the seven longest rivers in China. Its basin covers an area of 216, 960 square meters. For quite a long time, Liaohe River has been heavily polluted, with 90% of sections exceeding Tier V Criteria, which has lost its function as domestic water source. It also faces a serious water shortage problem. In 2000, the main stream of Liaohe River suffered water-break of over 200 days.
To solve the water supply problem, Liaoning plans to build 29 more sewage treatment facilities. It also plans to renovate the 1200-kilometer outdated water supply pipeline network within three years, which may need an investment of RMB700, 000 (USD84,694).
U.S. manufacturers and suppliers in the pollution control sector and building materials sector may find opportunities to export their products and services to these projects in Liaoning.
(Source: Shenyang Daily, 02/21/03 - Translated by Shenyang Post)
2. Chinese Consumer Index Ranking First In Asia Pacific
A latest survey conducted by Mastercard International reveals that when most consumers in the Asia Pacific region are pessimistic about the current economic climate, consumers in Mainland China have strong confidence in the future, making them top the Company's Consumer Confidence Survey in the past three years. This survey has been carried out concerning five aspects including employment prospect, national economy, fixed salary, stock market and life quality. The survey shows that consumers in Mainland China are extremely inspired with enthusiasm about the future. Their confidence index, which is 84.4, ranked the first in the Asia Pacific region in 2002, increasing by over 10 points compared to 73.6 a year ago.
Index for the above mentioned 5 aspects have all increased by a big margin, especially the employment prospect (whose index has increased from 53.6 to 74.6) and the stock market (from 57.1 to 68.3). In terms of the cities surveyed, interviewees from Shanghai have the biggest prospect (with index reaching 89.5), while those from Beijing (83.2) and Guangzhou (80) also surpassed 80.
(Source: Beijing Business Daily, 02/11/03 - Translated by Shen Yan)
3. Universal Service Fund May Open up Market for Lower-cost Telecom Products
Establishing a universal telecom service fund has become a priority for China's telecom authorities this year. The fund, aiming to extend telecom services to China's most remote and undeveloped regions, may begin as early as the first half of this year, according to an early February report in Business Post, one of the most informed and influential journals in China.
China Telecom (including China Netcom), which currently bears almost all of China's universal servicing costs, will be the main fund beneficiary, while net profits of China's two wireless carriers, China Unicom and China Mobile, will be slightly negatively impacted.
The report indicates that initial funds for the universal service will be drawn from a telephone number resource charge to be levied on all telecom carriers. The Ministry of Information Industry (MII) will have to establish a special organization to manage the pool of money.
The telephone number resource fee is expected to run between RMB 0.01 (USD 0.0012) and RMB (USD 0.0024) per number, according to the BOC International Securities Co. At the end of last year, China had 206.616 million mobile phone users and 214.419 million fixed-line telephones. About RMB400 million (USD 48 million) will be collected by the fund each year.
According to MII’s 2002 annual report, telephone service has not yet reached 14.7 percent of the China’s rural areas. Building networks in remote and rural areas is high-cost, while returns are low and slow, since economic development in these regions lags far behind the national average. In this case, whichever carrier is assigned to undertake the task of providing services in these regions will look for lower-cost but durable telecom equipment to build the network. It may open up some market opportunities to VSAT and similar products given to the fact that these are mountainous areas and it is difficult and economically not viable to place cables and other costly equipment in this section of the network.
(Source: Business Post, 02/07/03 - Translated by Michael Wang)
4. A Review of China's Oil Market and Outlook for 2003
Crude supplies were adequate in the Chinese petroleum market between January and December 2002. With control and adjustment of gross volumes, the supply of gasoline, diesel, kerosene and fuel was slightly lower than the demand, with stockpiles declining. Prices of domestic oil products fluctuated due to internal and external influences. The official median retail price for gasoline and diesel reflected an upward trend while there were good developments in market circulation. Looking to 2003, oil demand growth rates will level off compared to the same period in 2002, but further economic growth will keep oil demand growing. Changes in economic structure will cause variations in the oil product demand structure. China's crude oil supply will remain stable in 2003 while the crude oil processing volume will reach 220-230 million tons. Output of gasoline, diesel, fuel oil, naphtha, kerosene and LPG will grow compared to 2002. The annual average prices of gasoline and diesel are predicted to approach 2002 levels with the market largely stable. The government will further adjust the oil markets in order to perfect the market mechanism. However, issues remain in China's oil products distribution sector. National policies and real demand of the oil companies will help solve the issues existing in the oil and petrochemical enterprises.
(Sources: China Petroleum Economics, Vol. 12 - Translated by Cindy Wang)
5. China - The Largest Pulp Importer in the World
China’s imports of pulp soared in 2002, as China became the largest country for pulp imports.
According to the updated statistics released from the General Administration of Customs, PRC, China imported 5.26 million tons of paper pulp in 2002, increasing 7.4% over 2001. The total value reached about USD 21.68 trillion, 4.4% higher than the previous year. In addition, China’s imports of paper and paperboard totaled 6.33 million tons in 2002, valued at USD 35.40 trillion.
In recent years, China has closed a group of weed pulp-based paper mills in order to meet the requirements in environmental protection industry. Therefore paper companies intend to increase wood pulp ratio in their product competitiveness in the market.
Moreover China paper and pulp market attract more attention from foreign companies. More foreign investors enter China paper market and build large paper mills using wood pulp, such as Chenjiang Jindong Paper, Changshu Asia-Pacific Paper, Suzhou Jinhuasheng Paper and Jinhongye Paper.
(Source: China Chemical Week, 02/14/03 - Translated by Cao Yue)
6. Foreign Investment Allowed in Distribution but not Editing
According to the General Administration of Press and Publication of the People's Republic of China (GAPP), in the first quarter this year, China will issue regulations allowing foreign capital in China's books and periodical distribution market and further open the books and periodicals' wholesale market in Chongqing, Ningbo and all of the provincial capital cities. GAPP will formally accept applications from foreign investors after the publication of the regulation. However, no foreign investment will be allowed in the editing business.
According to the WTO agreement, China promised to open its books and periodicals' wholesale market in Beijing, Shanghai, Tianjin, Guangzhou, Dalian, Qingdao and five economic zones in the first year after China joined WTO, and agreed to liberalize the books and periodicals' wholesale market in Chongqing, Ningbo and all of the other provincial capital cities in the second year, before finally liberalizing the entire market and lift the limitation of foreign distribution companies in quality, region and shareholding..
Currently, 60 foreign companies have already established offices in China and plan to set distribution enterprises in China's books and periodicals market.
CS Beijing will monitor the publication of the regulations and will provide it to companies upon request once it is published.
(Source: China Press and Publication Journal, 01/29/03 - Translated by Qiu Jing)
Embassy News
Are you looking for consultants, lawyers, translation companies or other support services in China? Check out our Business Service Providers page on the CS China website for listings of qualified service providers who stand ready to help you in China. http://www.buyusa.gov/china/en/bsp.html
Consulate News: Shenyang
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 Shenyang:
U.S. Trade Development Agency Country Manager Mark Dunn will visit Shenyang March 2-5, 2003 to discuss proposals presented by the Liaoning Environmental Protection Bureau concerning treatment of hazardous materials and air quality monitoring, and to introduce the TDA program to other Liaoning government agencies.
For more information on CS Shenyang and the Shenyang consular region, visit our website at http://www.buyusa.gov/china/en/shenyang.html
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.
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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.
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