Highlights from the Economic Observer, issue no. 357, March 2nd 2008.

Finance Ministry to Get Tougher on Budget Applications
Cover story
Annual budgets will come under tighter scrutiny now that Zhu Zhigang was been appointed the director of the National People's Congress' Budget Workgroup Standing Committee on February 28th. As the previous head of the Finance Ministry's budgeting office, he was known for coming down on unrealistic or exaggerated budget requests. Representatives are meeting this week to review last year's budget and vet 2008's requests, and some have already responded that the latter's are clearer and more concrete.
Original article: [Chinese]

Restructuring of Large Agencies Takes First Steps
News, page 3
On February 25th, the party's central committee passed "Suggestions on Reforming Administrative Management System" and "State Council Structure Reform Plan", both of which will be submitted for approval to the State Council this month. The first step in the restructuring is the merging of 28 departments into 21, and will most affect those that supervise energy resources, transportation, industry, and environmental protection. 

Farmers Struggle to Earn Another Penny
News, page 6

Farmers in Jilin province are being pressed by increasing corn and fertilizer prices. EO Reporter Li Ping covers one farmer's struggle to make ends meet.
Original artilce: [Chinese] 

Real Estate Developers Ponder Guaranteed Housing Market
News, page 7
After new regulations came out forcing Beijing, Tianjin, Shanghai, Inner Mongolia, and other municipalities to guarantee that the 1/5th to 1/3rd of the total surface area of residential property be made up of "guaranteed" housing, greatly exceeding the expectations of real estate developers. Aside from how this will affect market prices, developers are pondering whether or not to enter this new industry. Two more measures will likely be announced this month as well.
Original article: [Chinese] 

From Harmonious Society to "The Five Haves"
Special, page 9
As the first plenary session of the 11th National People's Congress convenes, the EO pushes for leaders to make headway in satisfying the "Five Haves" for all Chinese: education, income, health care, care for senior citizens, and housing. Only in directly addressing these can a harmonious society be established, argues Meng Lei, chief commentator in the special's foreword. Our 15 page spread includes in-depth features and exclusive interviews, with journalists reporting from all over China--including Chongqing, Harbin, Hubei, Suqian, and Shenzhen.
Original article: [Chinese]

China Life Asked to Pay More for Trust Company Stake
Money & Investment, page 28
China Life Insurance's plan to pick up 60% of a strategic stake in China Credit Trust Corporation may come at a price double the value anticipated. The latter's desired parting price is between six and seven billion yuan, opposed to the 3.6 billion yuan offered by China Life last year. Industry sources believe China Life is determined to acquiring China Credit Trust, which has funds, futures and securities company licenses under its belt that the earlier is eager to leverage for diversification. A source in China Life discloses that the two parties have signed a preliminary agreement but have yet to agree on a price.
Original article: [Chinese]

Shenzhen Local Government Helping Start-ups to List
Money & Investment, page 29
The Shenzhen local government has planned to allocate 180 million yuan worth of assistance funding to help qualified start-ups be listed on the new Growth Enterprise Board, soon to be introduced at the Shenzhen Stock Exchange. The funding is aimed to help resources strapped small and medium enterprises (SMEs) to list and raise the much needed money for development. Qualified start-ups may apply for 3.1 million yuan each in assistance for domestic listing while an overseas listing may receive 2.1 million yuan each in aids. It is reported that about 100 start-ups are expected to become the first batch of enterprises to be listed on the Growth Enterprise Board.
Original article: [Chinese]

CIC International Tendering Process in Full Force
Money & Investment, page 30
Over 200 international fund managers have submitted applications in the tendering process for handling China Investment Corporation (CIC) assets, 10 of whom would be short listed in a few months. The Chinese sovereign wealth fund is hiring international managers to look after its four mandates: global equities, Asia non-Japanese equities, emerging market equities and Europe/ Australasia/ Asia equities (EAFE). The tendering process ignited frenzied lobbying from the world's top fund managers for the limited slots. CIC is hoping that the open tendering will boost its reputation for transparency and openness on the world stage.
Original article: [Chinese]

Advertisement Boom for Internet Gaming
Corporation, page 39
A maturing internet gaming industry in China has attracted international brand names to look for innovative advertisement space within gaming programs. A company named In-Game Media is a pioneers in planting subtle advertisements that blend into the game setting – such as having "Nokia" printed on balloons tied to the rear of race cars, thus having the brand name fluttered in the air as the cars zigzag the race course. Online gaming companies are exploring new ways to attract advertisers in order to stay profitable, as many see charging gamers a fee to play online games as unsustainable in an increasingly competitive industry.
Original article: [Chinese]

China's Political Reforms to Complement Economic Growth
Observer, page 42
The Chinese model of political reforms should prioritize social stability to ensure continuous economic growth, according to Zhou Tianyong, deputy chief of the Party School of CCCPC (Central Committee of Communist Party of China) research department. Zhou says stability is the foremost goal and only a certain scale of strong centralized government could deliver such economic prosperity. He believes that the core of political reforms should emphasize on removing barriers that hamper the growth of investments, start-ups, business operations and employment.
Original article: [Chinese]