Highlights from the Economic Observer, issue no. 361, March 31 2008
New Energy Bureau Gets a Chief
Cover
Zhang Guobao, the recently appointed head of the freshly minted Energy Bureau, will have to lead the fledgling body in a trying time of rising international oil prices and a widening domestic power shortage. Though outsiders have called the merging of several former energy-related departments into the new bureau a minor change given that it is still not an actual ministry, Zhang tells the EO that there will in fact be significant differences, including more transparency. He says that the Energy Bureau will not set prices, a task that will be left for the National Reform and Development Commission's price department, though it will offer suggestions and make proposals.
Original article: [Chinese]
Lawmakers Speed up Reform of State Assets
News, page 3
On March 17, while the National People's Congress was busy approving the next slate of ministers and top administrators in the Chinese central government in the last day of its session, the NPC's Legislative Committee convened a special session to discuss an early draft of the State Assets Law. In the days leading up to this, a major overhaul of the Chinese administration, which led to departmental consolidation and five new super ministries, had not touched upon the State Assets Supervision and Administration Commission. Sources say that representatives from the Commission were not invited by the legislative committee to partake in the draft discussion in order to stave off debate. More drafting will occur in June and August of this year.
Original article: [Chinese]
Government Ups Guarantees for Agriculture Subsidies
News, page 4
Less than half a month after the NPC approved over half a trillion yuan to be spent on the "three agricultural issues", the central government decided to add another 25 billion in order to further encourage agricultural development and grain supplies. Twenty billion will go straight to subsidies for agricultural production and seed.
Original article: [Chinese]
Wenzhou Investors to Set Out for Vietnam, Cambodia, Pakistan
Nation, page 9
Investors from Wenzhou have received government approval to visit industrial parks abroad, and will set out for Vietnam, Cambodia, and Pakistan within two months. This week, our Nation section features a special on how Wenzhou's investors have become increasingly enamored by and involved with foreign investments, exemplified by a 2006 purchase by Wenzhou businessman of a United Arab Emirates state-owned television station.
Original article: [Chinese]
After Privatization, Bus System Ignores Bottom Rung
Nation, page 14
In Changsha, Hunan province, public buses now run by private businesses frequently pass elderly whom drivers suspect are holders of red cards that they can use for free rides. The trend is happening all over China, and other ills attributed to privatization in public transportation have led lawmakers in other places to react strongly. In Hefei, Anhui province, after a bus accident killed 11 passengers, the local government returned the industry to public administration.
Original article: [Chinese]
Rumors Give the Market a Shot in the Arm
Money & Investment, page 17
Rumors that the Chinese government might take action to save the market spurred the Shanghai Stock Exchange to shoot up 168.56 points and close at 3,580 on March 28 after weeks of decline. The rebound came as rumors spread the possibilies of a stamp duty cut, that listed companies would repurchase their shares, that there would be a limited re-issuance of shares, and that a timetable for the futures index would be disclosed, among others.
Original article: [Chinese]
Bank of China Annual Report Out
Money & Investment, page 20
The Bank of China has in last year recorded a post-tax profit of 13.6 billion yuan, or a growth rate of 31.92% compared to the previous year, despite volatile global economic conditions. The data appeared in the bank's annual report, released on March 25. The bank has stated that net interest income, processing fees, commissions, and investment returns were the main contributors to the growth.
Original article: [Chinese]
China Southern Power Grid to List
Corporation, page 25
China Southern Power Grid, which was earmarked as the poster child of China's electricity corporations' reform, aims to be listed on the Shanghai and Hong Kong Stock Exchanges by end of the year. The company – which supplies electricity to Guangdong, Hainan, Guangxi, Guizhou and Yunnan – is jointly owned by China Life, local government agencies in Guangdong and Hainan, and the state power company. It will be the first Chinese power company to list, and thus has garnered close attention from China's State Council, the National Development and Reform Commission, and the state power and securities regulatory boards. As power supply is a monopoly industry in China, market analysts believed investors, especially foreign ones, might exercise more caution and be skeptical of returns, especially given the lack of transparency in electricity pricing.
Original article: [Chinese]
China's Leading Developer Lowering Real Estate Pricing
Corporation, page 27
China's leading property developer, Vanke, lowered property prices in major Chinese cities, sparking new speculation over its cash flows. Vanke, however, has clarified that the move to cut prices between 5% and 30% was to adjust accordingly to the market need. Market observers believed Vanke was taking the lead in response to slowing market demand, and more developers are expected act similarly in the coming months to stimulate sales.
Original article: [Chinese]
