Highlights from the Economic Observer, issue no. 343, Nov 26, 2007
Tony Blair as Chinese Real Estate “Spokesman”
Cover story
Half a million dollars is what it took for former British prime minister Tony Blair to make a three-hour appearance at a villa in southern China on behalf of Chinese firm Sunshine Enterprise. The Dongguan-based company used the appearance to polish its brand just before launching its luxurious villa project by Shongshan Lake. For many local Chinese, Dongguan evokes an image of dense factories and heavy industrial pollution.
Full article in English translation to be uploaded soon…
Original article: [Chinese]
New Corporate Tax Rules to Come Out
Cover
The much-anticipated Corporate Tax Law is likely to be passed by the State Council within the month. The EO has learned that the controversial rules have been amended numerous times and the final draft will contain some 120 articles. A draftee has told EO that the new tax structure has five contentious areas, namely the definition of new technology enterprises, taxes on dividends, anti-tax evasion and transfer pricing rulings, tax incentives, and deductible items from taxable income.
Full article in English translation to be uploaded soon…
Original article: [Chinese]
Rolling Out the Luxury... Computers?
Cover
Chinese computer makers are tapping the high-end market by introducing laptops with bleeding edge components and design priced at over 50,000 yuan per piece. With luxury product consumption growing 20 percent per year, China's luxury goods market is expected to hit 11.5 billion dollars by 2015. Computer makers like Lenovo and Haier are also eager for a slice of the pie-- the former has introduced a limited edition of ThinkPad classics while the latter has come up with two new high-end models.
Full article in English translation to be uploaded soon…
Original article: [Chinese]
Concerns from the Top
News, page 3
On November 19th during the East Asia Summit in Singapore, Chinese premiere Wen Jiabao voiced his concern over trends in the mainland real estate industry and stock markets. The premiere went on the record as saying, “On matters related to the people's daily life, I focus most on real estate… we must educate the public about investment risks and provide risk reminders…”.
Original article: [Chinese]
Nominations in for Central Bank's Second in Command
News, page 4
Senior officials from various Central Bank branches gathered on November 22 to propose candidates for filling the Bank's deputy chief post, which was left vacant by Xiang Junbo this past July. Among the nominated are three of the current Central Bank chief's assistants, namely Ma Delun, Yi Wang, and Du Jinfu. At present, the Bank has four deputy chiefs, and the vacant slot is still waiting for Central committee appointment. It is said that the shortlist will only serve as a point of reference. Xiang left the Central Bank to head China's Agricultural Bank.
Original article: [Chinese]
International Investors Eying Health Care Sector
News, page 6
The Ministry of Health is worried about international investors rushing into the health care sector, and has raised the bar for the related investment approval processes. The Chinese health care industry is expected to be worth 27 billion dollars by 2010, and in recent months, several venture capital investors from the United States and England have expressed their interest in taking a stake in privately owned local firms. The government fears that the influx of international capital would lead to a brain drain in public health care, as the private sector would offer better compensation.
Full article in English translation to be uploaded soon…
Original article: [Chinese]
A Mix of Monetary and Fiscal Policy is the Way Forward
News, page 7
Echoing calls made in last weeks paper, State Statistics Department chief and Tshing Hua University economist Xie Fuzhan believes an effective blending of monetary and fiscal policy would pave the way for healthy economic growth in China. Xie lists three steps for intervention: first, adjust the cost of production by reasonably increasing labor and capital costs as well as environmental conservation management fees; second, to increase government funding on retirement plans, health care and low-cost housing to boost consumer spending; third to stabilize prices of commodities.
Original article: [Chinese]
Bohai Seaports Vying for Dominance
Nation, page 11
Seaports in Qingdao, Tianjin, and Dalian are vying to become the shipping centre in northeast Asia. Although the State Development and Reform Committee has issued a blueprint to develop Dalian as such by 2020, authorities in two other regions are also contesting for the title, saying it should be decided based on actual trade volume.
Original article: [Chinese]
Shanxi Coal Miners Heading West
Nation, page 12
As coal resources dwindle and mines close down in Shanxi province, local miners are now heading west to the under-explored Xinjiang. Armed with skill and experience, they plan on taking full advantage of tax incentives there, where coal reserves make up 40.5 percent of the country's total.
Original article: [Chinese]
Shenzhen Quietly Cancels Cash Withdrawal Limits Meant to Combat Money Laundering
From Money and Investment, page 17
Less than half a month after being put into place, cash withdrawals at retail banks in Shenzhen are no longer being limited by the government. The policy, which was meant to close off a major source of funds for underground banking networks, has failed largely because these networks have moved into surrounding regions unfettered by such restrictions. In some cases, the underground networks have become even more profitable as a result.
Original article: [Chinese]
Three Major Chinese Banks' Stumped on Share Option Reform
From Money and Investment, page 19
Sources have told the EO that three major Chinese banks-- the Industrial and Commercial Bank of China, Bank of China, and China Construction Bank-- have been unabe to receive approval for their submitted stock option reform plans. Sources say that the Construction Bank will serve as a testing ground for options reform, meanwhile, the Ministry of Finance is currently drafting new guidelines for stock options among high-level management in state-owned financial institutions.
Full article in English translation coming soon…
Original article: [Chinese]
Real Estate Firms Lining Up To List
Beijing's Low-rent Housing Not a Cure-all
From Property, page 39
Beijing has unveiled its latest pilot low-rent housing project in Xuanwuqu district in the south of the city, but as one applicant has found out, the housing choices are not as desireable as once imagined. The unusually cramped and bare units are hard to compare to the larger, furnished, and immediately livable spaces established in 2004 under Beijing's first low-rent communities elsewhere in the city.
Full article in English translation coming soon…
Original article: [Chinese]
