MARKET WATCH

Chinese stocks plummeted nearly 7 perrcent on May 30, leading to a los of over 1 trillion yuan. The sharp drop was caused by an increase in stamp tax on stock trading, tripling the previous rate. It was considered a market correction and was right in time to kill recent stock mania around the country. The Chinese stock market rebounded the following day, showing off investors' strong expectations. The Shanghai Stock Exchange stated China is preparing for overseas-listed Chinese companies and international blue chips to be listed on the mainland. The Chinese oil giant Sinopec survived the drop, as it had discovered a new oil field and was expected to generate more profits for its shareholders. Apart from exploring more oil and other traditional energy sources, China is also devoted to developing nuclear power. Government officials disclosed that domestic private companies and foreign companies will be allowed to invest in Chinese nuclear power plants, but didn't give an exact timetable. Private companies have performed well in China and their fixed asset investment accounts for 56 percent of the nation's total.     

Views on the ‘Four Comprehensives’

<正>The"Four Comprehensives"may constitute the main pillars for the next phase of the Chinese social and economic transformation.The general direction of these principles is,however,not new.It has been widely recognized that China needs ongoing reforms for more sustainable and socially inclusive growth.Otherwise,imbalances will increase,posing higher risks to the Chinese and world economy.Being principles,they are rather vague and leave much room for interpretation and adjustment.Concrete targets on the social and economic transformation have not been set.The need for reforms is urgent in many areas,and it is a challenging task to keep the balance.Development priorities Future GDP growth should become more sustainable and should not harm the environment.Eco-friendly growth can be supported if the service sector accounts for a higher share of the economy.The service sector is also less productive on average,implying that high employment can be realized even at     

MARKET WATCH

TO THE POINT:The Hong Kong and New York listed China Netcom felt early pressure in the new year on news of its diminished telecom sales in 2007.Yet the biggest operator China Telecom came out on top, though barely meeting its year-end targets.China cut the major fuel import duty to cope with a national fuel short- age,while steel export duty was raised again in a bid to curb the export of energy-consuming products.Middle- class breadwinners must report their income from stocks and properties to the tax authorities.Foreign financial institutions will have more access to the Chinese capital market in the new year.     

An Altered Pattern of Economic Growth

CHINA'S economic boom has been a focus of world attention For more than a decade. Its GDP having increased almost 13-Fold in the past 15 years, economy and development are two of the most Frequently heard buzzwords in the Chinese media. China is also holding its own within the global economy. and in 2004 was the number one contributor to global trade growth. Products "Made in China" are to be seen in every country in the world, as are Chinese investors. The rapidly growing Chinese economy has indisputably brought with it improvements to living standards, but has also engendered social problems. At the Fourth Session of the Tenth National People's Congress. Chinese Premier Wen Jiabao listed in his 2006 government work report the problems that have emerged in the past five years of economic and social development. They are: an irrational economic structure; lack of motivation to innovate: excessive consumption of energy resources; alarmingly high environmental pollution; uneven regional development and a widening income gap; and sluggish promotion of social welfare. In order to solve these problems, the Chinese government has proposed a new pattern of economic growth whose emphasis is on social development and conserving energy and resources. Within this new development mode, economic growth will depend less on resource consumption and more on technological and human resources. In the past, the government sacrificed rural interests in order to boost industrial development in urban areas. Its current plan is to invest in and channel funds towards stimulating the rural economy, and also to make various public services available throughout China's vast countryside.     

Market Watch

On July 19, the National Bureau of Statistics unveiled the first half macroeconomic situa-tion for China. Strong GDP and investment growth, espe-cially the rising consumer price index (CPI), indicated signs of an overheating economy. But the release of sta-tistics calmed down stock investors and the mainland market declined 0.44 percent on that day. Insurance companies can now double their investments in the stock market, a move believed to help stabilize the mar-ket. The Chinese merger and acquisition (M&A) cases have grown in an effort to optimize industry structure. Meanwhile, as of August 1, taxes on resource products will be much higher. Battles between China and the United States over food issues further deepened as both countries banned certain food imports from the other, though it was noted that officials from both countries will meet in the coming months to discuss food safety.     

A Record of Reformation

Works by former Premier Zhu Rongji shed light on the country’s transformation The English edition of Zhu Rongji on the Record:The Road to Reform 1991-1997will be published in the United States this September.The work will give readers a chance to learn more about China’s economic and social reform during a crucial period.Zhu,who served as premier of China from1998 to 2003,is well known for his pragmatism and strong work ethic in driving the country’s transformation from a planned economy to a     

Big Plus Factor

The growth rate of the Chinese economy will be close to 9 percent or even higher, predicts Fan Gang, Director of the National Economic Research Institute. Speaking at a forum in Beijing last December, he also offers suggestions on how China can take advantage of the rapid growth to adjust its industrial mix and ensure a high employment rate.     

Retrospect and Outlook

The Chinese economy owes its success and survival from the economic meltdown to the series of responsive Central Government stimulus projects initiated in 2009.And as the new year progresses,the government's responses in the past year can be used to cast a positive outlook for the Chinese economy in 2010.Zheng Xinli,Vice Chairman of the China Center for International Economic Exchanges,offered his insights at the First Annual Meeting of the Chinese Economy held on January 17 in Beijing.Edited excerpts follow:     

MEANS TO AN END

The Chinese Government will offer preferential income tax treatment to enterprises in the field of integrated circuit (IC) design and software, the Ministry of Finance said in a statement on May 22. According to the ministry, IC and software companies that made a profit before the end of 2018 will be exempt from paying income tax for two years, while the in come tax rate will be halved to 12.5 percent from 25 percent for the third to fifth years.     

A Stage for Designers

正The soul of a product is in its design.As the Chinese economy grows and Chinese people become more welcoming to new things,China has turned itself into a stage for designers to give full play to their creativity.China has built landmark buildings ranging from the National Stadium in Beijing,whose structural form is popularly described as a "bird's nest," to some of the world' s longest bridges and most livable urban communities.It has also produced leading fashion trends on catwalks as well as state-of-the-art high-speed trains.Design can be found,touched and enjoyed everywhere.     

MARKET WATCH

Most of July’s macroeconomic statistics have surfaced, all indicating robust investment and consumption as well as more trade surplus. The surging national economy also saw a sharp rise in the consumer price index (CPI), with its growth rate the highest in a decade. Domestic auto sales also increased significantly, but the number of domestic flights will be reduced due to the lack of skilled maintenance workers. Amid violent volatility in the Chinese stock market,the first financial derivative stock-index futures are expected to be traded on the mainland in September.     

IPO Resumptions Signal Stock Market Restoration

<正>The China Securities Regulatory Commission(CSRC)will resume initial public offerings(IPOs)by companies and further reform the current IPO mechanism,said Deng Ge,CSRC spokesman at a press conference on November 6.Ten of the 28 companies that have already gained regulatory approval for new share sales will be the first to start their IPOs after     

MARKET WATCH

The Chinese Government adopted a package of mea-sures to rescue the tumbling mainland stock markets. It will let listed companies repurchase their shares in the open markets and require the government's investment arm to increase its holdings in major listed domestic banks. But most notably,the government ditched the stock trading stamp tax charged to those who buy shares. Mainland steel prices are expected to drop in the fourth quarter when industry leader Baosteel cuts its prices in October and November. Chinese companies such as Sinosteel and China Oilfield Services are increasing their acqui-sitions of,and stakes,in foreign companies.     

Investment Still Matters

正The Chinese economy has entered a"new normal"characterized by a slowed growth rate.The three major growth drivers,namely demographic dividends,dividends from institutional reforms and investment,are running out.The"new normal"is also characterized by continuous optimization of the economic structure and a shift from investment-driven to innovation-driven growth.Many scholars argue that over-investment has caused imbalance in many areas,such as a large proportion of manufacturing sector in the economy and insufficient consumption.Therefore,they think the proportion of investment should be reduced if China wants     

Real Economy Faces Real Challenges

正Interim reports from listed companies show the Chinese economy still faces downturn pressure Shanghai-listed Tianjin Quanyechang (Group) Co. Ltd. unveiled on July 11 its performance in the first half of 2012, the first listed company to do so this year. According to their commitment to the China Securities Regulatory Commission (CSRC), all 2,428 listed companies in China will publish interim reports by August 31.     

An Invitation to the World

The first China International Import Expo (CIIE) will take place on November 5-10, and as the first ever expo in the world with imports as the theme, it will be a big event with an eye on pressing ahead with a new round of opening up at a higher level. This will be a major step in China's resolute support for economic globalization and the country's active opening up of its mar-ket to the world.     

CHAMBER OF COMMERCE INFORMATION

Experience Japan The Japanese Chamber of Commerce and Industry will further promote its Japan-experience program and seek cooperation with various Chinese institutions.Between early May and June 2007,the chamber organized a Chinese college student delegation to Japan with the support from its members in China.     

Testing the Waters

Are the Israelis and Palestinians on the right track toward peace? The world is keeping a keen watch on developments in Israeli-Palestinian tension as both sides embark on forming new governments. The policies that come from these governments will decide the future of the region. Unfortunately, both sides have got off to a bad start on peace negotiations. Each has taken a hardline stance as neither wants to be seen as weak at the beginning of their administration. Israel has been launching strikes-political, economic and military-in an attempt to make the Islamic Resistance Movement [Hamas] government cave in.     

Learing the 3Cs

Chinese home appliance makers are trying to activate any link between computers, communication and consumer electronics It's a scene that has failed to materialize in the past, but companies in China are trying again: sitting in front of the television, the viewer surfs the Internet, buys things from online shops, plays online games and makes video phone calls. The TV will transform into a catch-all information appliance, to be used as computer and telephone. While the technology is already avail     

Coping With Inflation Pressures

The pressure of higher prices is a major problem confronting the Chinese economy"We will be facing fairly great price pressures in 2008,"said Xie Fuzhan,Director of the National Bureau of Statistics(NBS),on January 24."Even if there are no new fac- tors causing price hikes,the inertia from the rises in 2007 is still devastating."