U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 143
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: Matthew Gettman
Contributors: CS Guangzhou, Cindy Wang, Peng Aiqun, Xi Xianmin, Qiu Jing
News Briefs
In addition to the article summaries CS Beijing provides , 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 Guangzhou post.
1. Foshan City To Raise USD 23.3 Billion for 10 Major Projects
2. China’s Sustainable Development Strategy for Oil and Gas Resources and the Outline for Development of the New and Renewable Energy
3. First U.S. Dollar Denominated Bond Issued in China
4. RMB 100 Million To Be Spent on IT by Chinese Primary and Middle Schools
5. TDA Funds Chinese Cable Television Industry Orientation Visit to 3 U.S. Cities
6. Agricultural Machinery Market Heats Up
1. Foshan City To Raise USD 23.3 Billion for 10 Major Projects
In order to promote economic growth in the Pearl River Delta and speed up city development, Foshan, the third largest city in Guangdong province, has plans for completing 10 major projects in the next five to ten years. The total investment is estimated at USD 23.3 billion, most is expected from nongovernmental sources.
At a recent promotion conference, attended by over 120 guests representing 60 domestic and international consortiums and international investors, Foshan Executive Vice Mayor Chen Yunxian stated that in order to attract more capital from home and abroad, various market-based methods would be introduced, such as: consortium loans; capital market financing; project financing; domestic and international investment; BOT; and, TOT. Principles of government promotion, market operation, and social participation will govern this construction project. The Foshan Municipal Government also plans to form a project committee to manage and supervise the use of investment capital.
The Foshan Municipal Government has announced 10 main projects including 103 sub-projects. The 10 main projects cover areas such as: transportation network; city-to-city express light rail; environment; energy; water conservation; urban construction; information technology; education; and, culture. 48 out of the 103 sub-projects have already been launched, including: Expressway of Ring Road Line 1; renovation of Shinan Boulevard; Lanshi Bridge; Gaoming Bridge; Shunde Damen Sewage Treatment Plant; Nanhai No.2 Sewage Treatment Plant; Chancheng Green Water Project; 2nd phase of Shakou Power Plant; Consolidation of Foshan Embankment; and, city telephone system upgrade.
(Source: Guangzhou Daily, Foshan Daily, 08/29/03, prepared by CS Guangzhou)
2. China’s Sustainable Development Strategy for Oil and Gas Resources and the Outline for Development of the New and Renewable Energy
China’s sustainable development strategy for oil and gas resources should place emphasis both on resource development and energy saving. The exploration and development strategy should place emphasis both onshore and offshore, both oil and gas fields and foreign cooperation both at home and abroad. It is necessary to promote structural adjustment, technological renovation and establishment of energy-saving economics based on a combination of reasonable development with effective utilization. China plans to establish effective laws and regulations, strengthen supervision and policy control and effectively standardize resource development and energy saving instead of relying on administrative means.
Over the next 7 years, the development of the new and renewable energy aims to increase the conversion efficiency, reduce the production cost and increase the proportion of the new and renewable energy in the energy structure. The development also strive for a big breakthrough in innovative process and technology in order to make it possible to form a comparatively perfect production and service system through mass and modernized production. Lastly, the development hopes to realize the target on its applications up to 3.9 million tons of standard coal (including traditional application of biomass energy) so as to make contributions to the sustainable development of national economy and environmental protection. The development should ultimately reinforce the pilot demonstrations and the conversion of the scientific achievements in order to facilitate the formation of industrialization, commercial production and promotion. The following are the detailed development goals:
1. Research and develop high-efficient and multifunctional fuel forest tree seeds and the technology of fast growing trees forestation. Strive to make the area of fuel forests reach 13.4 million hectares by 2010.
2. Speed up the replacement of old generations on the applications of biomass energy. By 2010, biomass energy can be utilized with the capacity equaling to 17 million tons of standard coal respectively.
3. Develop the methane energy by conversion of organic wastes in breweries, sugar refineries and livestock and fowl breeding farms into high qualify energies and in line with comprehensive utilization of methane in order to increase the value of application. Strengthen the design specifications, standard and the supply of complete equipment in the large and medium-size methane projects in order to supply methane for 12.35 million households by 2010, and reach the capacity of 4 billion cubic meters, equivalent to 3.14 million tons of standard coal, by 2010.
4. Speed up the development of small hydraulic power energy. By 2010, the installed capacity of small hydraulic power stations will reach 27.88 million kilowatts. Generated energy will reach 117 billion kWh, equivalent to 49.3 million tons of standard coal.
5. Enlarge the development and utilization of solar energy. Priority should be taken on the popularization and application of energy-saving solar buildings, solar energy water heaters and photovoltaic generating systems. Total utilization capacity of solar energy will reach 4.67 million tons of standard coal by 2010.
6. Continue to develop the production of small wind-turbines and the sales and maintenance service. Create conditions to make the national wind power development capacity reach 1.1 million kilowatts, equivalent to 1.08 million tons of standard coal, by 2010.
7. Develop heat storage resources in addition to geothermal power stations in Tibet. Strive to reach savings of 1.51 million tons of standard coal by 2010.
8. Tidal energy development in Zhejiang and Fujian. Strive to build 30,000 kilowatts practical power stations by 2010 so that the yearly energy supply capacity can reach the equivalent of 310,000 tons of standard coal.
9. Speed up the progress of hydrogen energy producing, storage and equipment. By 2010, strive to build commercial solar energy and hydrogen energy systems and installations of coal chemical hydrogen making with a scale not less than 5,000 M3H2 a day.
10. Strengthen the research and application of organic wastes renewable technology. More than 300,000 kilowatts of the installed capacity are planned by 2010 powered by use of rice husk, wood, scrap, and garbage. At that time, the yearly energy supply will be equivalent to 80,000 and 500,000 tons of standard coal.
(Source: China Energy Resources Vol. 8, 2003 - Translated by Cindy Wang)
3. First U.S. Dollar Denominated Bond Issued in China
China Development Bank, issued the first US-Dollar-denominated bonds in China's domestic market on September 19th through a public tender arranged by the People Bank of China. Altogether, 40 financial institutions participated in the tender, and 26 subscribers bought five-year bond’s coupons with interest rate set as 3.65 per cent valued at USD 500 million. The largest investor was the Bank of China, followed by the Agricultural Bank of China and Beijing City Commercial Bank.
It is said that the capital absorbed by the USD bond issue will be lent to state-owned enterprises (SOEs), so as to help SOEs replace the existing high-cost foreign debts with less expensive domestic ones, reduce SOEs’ financial costs, and to control the foreign risk of debt. SOEs will have future opportunities to borrow hard currency in domestic market.
As one of Chinese policy banks with best credits, China Development Bank issued bonds in the international market in 1996, 1997 and 1999, which were well received. The USD bond will lift demand for dollars in the interbank market, and will ease pressure from the Chinese Central Bank.
(Source: Financial News, 09/20/2003 - Translated by Peng Aiqun)
4. RMB 100 Million To Be Spent on IT by Chinese Primary and Middle Schools
China boasts the world's largest education system with 1.35 million schools for 230 million students. One in every four Chinese citizens is a student. One in every 121 middle and primary students have a computer. Less than 30 million students receive information technology education.
Today, less than 10% of the schools have a campus network. By 2005, the Chinese Government aims to have all eastern region primary and middle schools above county-level and all primary and mid-western region middle schools above mid-sized city level establish Web sites. Further, the Chinese want all western region and remote middle schools at and below county level and central primary schools at township level to be connected with the China Education Satellite Broadband Network. The Government anticipates spending RMB 100 million (USD 12 million) on IT hardware, software and network products.
(Source: eWeek Issue 34, September 22, 2003 - Translated by Xi Xianmin)
5. TDA Funds Chinese Cable Television Industry Orientation Visit to 3 U.S. Cities
The United States Trade and Development Agency (TDA), organized and funded a delegation during the last two weeks in September from the Chinese Cable Television Industry to introduce the delegation to U.S. companies and technologies, entertainment and information systems technologies and frameworks. TDA hopes to provide the delegation with a unique perspective on a broad range of U.S. cable products, equipment and services.
The orientation visit to Denver, CO, Washington, D.C. and San Francisco, CA, attracted numerous U.S. companies interested in the China market and included visits to the U.S. Federal Communications Commission, CNN and Comcast.
(Source: FCS Beijing)
6.Agricultural Machinery Market Heats Up
According the updated information from the China Customs, China’s foreign trade showed substantial growth in agricultural machinery industry in the first half of this year. The total import and export rate in this industry reached USD 3.173 billion, 53.5% higher than the same period last year. In the first six months of 2003, China imported USD 2.102 billion of agricultural machinery, a 56.8% growth rate.
In the key twelve categories of imported agricultural machinery, eight increased, including husbandry feeding machinery, grain-processing machinery, diesel engine parts, harvesting machinery, high and medium horsepower tractors, irrigation and drainage machinery, plant protection facilities, accessory products to agricultural machinery and tools. Among that, the first four categories showed growth rates of 113.6%, 109.9%, 103.5% and 100.5% respectively.
(Sources: China Agrochemical Week, 09/19/2003 - Translated by Yue Cao)
Embassy News
SCO Craig Allen hosted a Buyer Appreciation reception for over 50 key Government and private officials at the Capitol Club. Many FCS Beijing staff members utilized this opportunity to enhance their relationship with these officials to facilitate future exports successes for U.S. companies.
Consulate News: Guangzhou
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 Guangzhou.
Principal Commercial Officer Eric Zheng, Senior Commercial Assistant Shuquan Li, and Commercial Assistant Eileen Bai of FCS Guangzhou accompanied Consul-General Ed Dong to the China International Fair for Investment and Trade (CIFIT) in Xiamen. CIFIT is a major annual trade and investment fair organized by MOFCOM opening on September 8 in Xiamen. VIPs present this year included Vice Premier Wu Yi, MOFCOM Vice Minister Ma Xiuhong, and Chief Executive of Hong Kong SAR Tung Chee Hwa. The U.S.-China Business Council sent a delegation to the fair. In addition to attending major events of CIFIT, FCS Guangzhou had separate meetings with delegations from Guangdong, Fujian, Hainan and Guangxi as well as key officials from Fujian, Xiamen, and Fuzhou. For the first time, two major investment reports were released at CIFIT this year: "China Foreign Investment Report 2003" by MOFCOM and "2003 World Investment Report" by United Nations Conference on Trade and Development. According to the reports, as a result of continued economic slowdown, global foreign direct investment (FDI) fell 21% in 2002 to USD 651 billion, the lowest level since 1998. In contrast, China continued to be a bright spot for FDI in 2002 and surpassed the U.S. to become the largest recipient of FDI in the world. China utilized USD 53 billion in FDI in 2002, an increase of 12.5% over 2001.
For more information on CS Guangzhou consular region, visit our website at http://www.buyusa.gov/china/en/Guangzhou.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, 2003. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.