U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 136
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: Jennifer Chang
Contributors: CS Chengdu, Yue Cao, Merry Cao, Peng Aiqun, Qiu Jing, Shen Yan
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. Key Projects Stimulate Sichuan’s Economy
2. Domestic Demand for Engineering Plastics To Surge
3. Ministry of Culture Issues "Provisional Regulations on Internet Culture"
4. Foreign Banks in China and Personal Foreign Exchange Investment
5. China to Open Travel Agency Market
6. China’s Fixed Asset Investment Keeps Growing
1. Key Projects Stimulate Sichuan’s Economy
(Source: Sichuan Economic Daily, 06/11/2003 - Translated by Chen Ling )
This year, the Sichuan Planning Commission has put greater focus on economic tasks. In the face of SARS, the organization has adjusted investment structuring and increased investment in public health infrastructure.
The implementation of key projects has laid a good foundation for realizing the year’s target.
According to Mr. Xie Hong, Deputy Director of the Sichuan Provincial Planning Commission at a June 10 press conference on the progress of Sichuan’s key projects, the 119 key projects have had a good start, with rapid and continuously increasing investment. Furthermore, a number of major projects have been completed and will exert economic efficiency within the year; the pace of engineering on a number of key projects has quickened; and the construction of 16 large projects such as the Second Stage of the Guangan Electric Power Plant has also begun.
The Sichuan provincial government has made great efforts in restructuring investment to enhance investment in public health infrastructure. A disease control network between the provincial epidemic disease control center and municipal and county level disease control facilities will be built up within this year. The construction of 20 water, wastewater and solid waste projects along the Tuo River, Minjiang River and Jialing River with a total investment of RMB3.6 billion (US$ 435 million ) will also see forward progress. A number of key electric projects will be launched a head of the schedule, including 11 large and medium-sized power projects with a total investment of RMB 40.5 billion (US$ 4.89 billion ).
The introduction of foreign and domestic investment maintains on track. There are 17 foreign investment projects, each exceeding a total investment of US$10 million. Smooth progress was made on foreign government load projects. The Panxi Expressway with US$ 300 million in ADB funding, is now undergoing the bidding process, and due to begin construction in July. To present, Sichuan has signed 373 project contracts with 5 provinces in the coastal areas of China, totalling RMB30.2 billion (US$ 3.65 billion) in investment. On May 15, the Sichuan provincial government announced the first group of 200 infrastructure projects totalling RMB 20.3 billion (US$ 2.45 billion) in investment, and will soon publicize a second group of 100 projects.
2. Domestic Demand for Engineering Plastics To Surge
(Source: China Chemical Industry Newspaper, 06/08/2003 - Translated by Yue Cao)
According to a recent update from the China Engineering Plastic Industry Association, both the production and demand for engineering plastics were booming in China during the first five months this year. Domestic output rose 40% compared to the same period in 2002.
The General Secretary of the Association, Mr. Kai Zheng, expects that the market demand for the five basic engineering plastics will reach 800,000 tons this year as follows:
PA - 165,000 tons
PC - 405,000 tons
POM - 140,000 tons
PET and PBT - 68,000 tons
MPPO - 22,000 tons
In recent years, the domestic demand in China for engineering plastic products shows strong momentum, leading to increased demand for engineering plastic resins. From 1998 to 2002, the demand for the five basic engineering plastics grew at an annual rate of 30.3%. Among the five, PC held the No. 1 position with a growth rate of 43.5% in 2002.
It is expected that market demand for engineering plastics in China will reach 1.08 million tons in 2005 as follows:
PA - 210,000 tons
PC - 560,000 tons
POM - 180,000 tons
PET and PBT (100,000 tons)
MPPO (30,000 tons)
In 2010, the estimated total will reach 1.67 million tons as follows:
PA - 400,000 tons
PC - 780,000 tons
POM - 250,000 tons
PET and PBT -180,000 tons
MPPO - 60,000 ton
3. Ministry of Culture Issues "Provisional Regulations on Internet Culture"
(Sources: CS Beijing, Merry Cao - 06/16/2003)
On May 10, 2003, the Ministry of Culture released the "Provisional Regulations on Internet Culture". The Regulations cover all art products, audio and video products, online games, programs and cartoons that are produced, broadcast and transacted via the Internet, and governs units that specialize in such Internet Culture products. The regulation will come into effect on July 1, 2003.
According to the Provisional Regulations, all 'cultural' products imported via the Internet, including computer games, must first be reported to the Ministry of Culture for content supervision. The Ministry of Culture will respond to such supervisory reports within 30 days. Work units operating under the definition of 'Internet Culture Units' are not allowed to provide products containing content in opposition to the Chinese Constitution, national sovereignty and unification, national interests, and ethnic customs or harmony. Products that are of a pornographic, violent, cult/superstitious or gambling nature, or those that will be considered harmful to social values and Chinese cultural traditions, will also be banned.
The new rules divide the 'Internet Culture Units' (a term the Ministry of Culture will use to define an Internet Content Provider whose content includes or specializes in any of the following covered items: art products, audio and video products, online games, programs and cartoons that are produced, broadcast and transacted via the Internet) into profit-oriented or non profit-oriented. Establishment of the former requires approval from the Ministry of Culture, while that of the latter needs only to report to the Ministry. Those already in operation without the Ministry 's approval must apply for it within 60 days after the implementation of the new rules.
Non-profit-oriented 'Internet Culture Units' that are in violation of the new regulations could face a fine up to RMB 5,000 (US$ 600); for profit-oriented units could face a fine up to RMB 30,000 (US$ 3,600). Serious violations can further result in suspension of operation or termination.
The following website contains the full text of the Chinese language regulations. (www.ccnt.gov.cn ).
4. Foreign Banks in China and Personal Foreign Exchange Investment
(Source: Financial News, 06/06/2003 - Translated by Peng Aiqun)
On June 4, 2003, Citibank Shanghai Branch opened its new service, ‘Premium Deposit’, and became the first foreign bank in China to engage in personal foreign exchange investment.
‘Premium Deposit’ is a mature product in Citibank’s overseas market that combines foreign currency fixed deposit and foreign currency options. Since March 21, 2002, foreign banks in China, such as Citibank and HSBC, have been permitted to develop their foreign currency business in China. However, during the past year, although every big foreign bank in China opened various personal banking services, the personal foreign exchange service was limited to simple deposits.
Financial experts indicated that this ‘premium deposit’ product by Citibank, which engages the bank in personal foreign exchange investment, is a signal that as the financial market opens to foreign banks, personal financial services will become one of the major fields of competition between Chinese and foreign banks.
5. China to Open Travel Agency Market
(Source: International Financial News, 06/17/2003 - Translated by Qiu Jing)
Overseas investors will be allowed to establish wholly-owned travel agencies in China, two and a half years ahead of the World Trade Organization accession commitments schedule.
The China National Tourism Administration and the Ministry of Commerce issued a Provisional Rule on June 14, lifting the ban on establishing majority and wholly foreign-owned travel agencies in China. Under the new provisions, overseas investors will be able to establish majority foreign-owned travel agencies in five cities - Beijing, Shanghai, Guangzhou, Shenzhen and Xi'an, and the State Council-approved national tourism zones. The provision becomes effective 30 days after its issuance.
Such majority foreign-owned travel agencies can then be established, however, they will not be permitted to arrange overseas tours for Chinese mainland citizens going to foreign countries, including the Hong Kong and Macao Special Administrative Regions and Taiwan Province. Their business is expected to be restricted to China-inbound foreign tourism and domestic travel by Chinese citizens.
The provisional rule further stipulates that, in normal circumstances, each overseas investor may be approved to establish only one travel agency in China, in which it possesses controlling/majority or whole ownership.
The requirements for overseas investors to establish foreign-controlled travel agencies are as follows: they must be travel agencies or entities related to travel business with annual travel revenues exceeding $40 million; they must be a member of a local travel association, have a good international reputation and advanced travel management experience. For overseas investors who want to establish a wholly foreign-owned travel agency, in addition to the above requirements, the annual travel revenue must reach $500 million (rather than $40 million).
6. China’s Fixed Asset Investment Keeps Growing
(Source: Beijing Daily, 06/18/2003 - Translated by Shen Yan)
According to figures released by the National Bureau of Statistics, China’s fixed asset investment rose by almost a third during the first five months of this year.
Fixed asset investment totaled RMB 1,057.8 billion during the January-May period, a year-on-year increase of 31.7 per cent, according to the bureau.
The growth rate was 1.2 percentage points higher than for the first four months of 2002. Of total investment, RMB 535.3 billion was spent on infrastructure projects, a year-on-year increase of 28.7 per cent.
Spending on industrial renovations and upgrades rose a year-on-year 37 per cent to RMB 199.4 billion, while investment in real estate development rose a year-on-year 32.9 per cent to RMB 280.1 billion.
Embassy News
CS China Welcomes New SCO Craig Allen was officially appointed the Minister-Counselor for Commercial Affairs to the U.S. Embassy in Beijing, in May 2003. SCO Allen previously served as Senior Commercial Advisor for the National Center for Asia Pacific Economic Cooperation (APEC) in Seattle, Washington, and has also served in Tokyo, Beijing and Taipei. SCO Allen received a B.A. from the University of Michigan in Political Science and Asian Studies, and a Masters of Science for the Foreign Service from Georgetown University. He speaks fluent Chinese and Japanese. We warmly welcome our new SCO to the FCS China team.
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:
U.S. Company Security Briefing With New Regional Security Officer (RSO) On June 10, an RSO meeting was held in the Consulate General Chengdu by new Regional Security Officer Brunn. The purpose of the meeting was to introduce Ms. Brunn to the business community and to address the security posture of American businesses in Chengdu as related to recent world events. Invited participants were American business representatives in Chengdu and Chongqing including Chairman of AmCham Sichuan Bill Gormley, GM of Chengdu Aerotch Aki Nakano, GM of Gillette Chengdu Ms. Zhou Mingfeng, Brian Campbell from Webster University, Connie Chen from ChanganFord, Bill Kang from American International Group, Benjamin Wang from Coffee Beanery Chengdu and Jerry King from Boeing -Chengdu. CR Nickel and CR Cao coordinated with all the U.S. companies and provided them with invitation letters through Amcham Sichuan.
For more information on CS Chengdu and the Chengdu consular region, visit our website at http://www.buyusa.gov/china/en/chengdu.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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