Highlights from the print edition, issue no. 414 April 13 2009

New Money, Have you Seen it?
Cover
The Chinese government released over 4.5 trillion yuan in new loans during the first three months of the year, or 90% of the amount planned as part of an economic stimulus measure. But some market observers are asking where that money has actually gone, pointing out that much of it was limited to highly liquid assets. Other sources working in private equity told the EO that the industry was sopping up enormous amounts of funds.
Original article: [Chinese]

Exports Dive
News, page 3
Customs officials announced on April 10 that the value of China's imports and exports in March declined a total of 20.9% from the same period last year. The news came days after Chen Deming, head of China's Ministry of Commerce, wrote an article stressing that trade is a key factor for raising domestic demand and has been undervalued. Though there were flickers of positive signs for import and export growth in the near term, many officials and industry players remained pessimistic.
Original article: [Chinese]

Milk Scandal Scars
Nation, page 9
On the heels of major domestic dairy brands like Sanlu, Liyi and Mengniu, being decimated by the tainted milk-powder scandal last September, the last in the industry to be affected were China's dairy farmers. Caution by dairy producers', which has resulted in such new policies as purchasing quoates, have left farmers unable to sell off their fresh milk. Meanwhile, price slumps were also hitting their incomes. In order to minimize losses, some dairy farmers were making fresh milk into milk powder, and many were selling their cows to butchers.
Original article: [Chinese]

Tainted-Pork Stirs Guangzhou
Nation, page 13
Some 70 people in Guangzhou, the capital of Guangzhou province, fell sick after eating pork transported from Mengjin county in central China's Henan province. The local animal quarantine inspector discovered the pork was tainted by clenobuterol hydrochloride, a harmful additive used to increase pig's lean meat while reducing fat tissue. A local pig-keeper who sold pork to the local military told the EO that it was an "open secrete" in the industry to feed the additive to pigs, given that pork with too much fat was not welcomed by consumers outside the province. The additive also often hurt the pigs, often leading them to die suddenly. The EO found that only 2% of pigs were tested for Mengjin, making it harder to spot use of the additive.
Original article: [Chinese]

Inflated Loans May Reach 400 Billion Yuan
Markets, page 17
New loans in March reached 1.89 trillion yuan, China's central bank said on April 13. However, an industry researcher told the EO that of the amount, some 400 billion yuan was in inflated loans, popular among the four large state-owned banks. One of most popular ways banks created these inflated loans was after a bank issued a loan to its client, the latter would deposit the loan to the bank and in turn, the bank would circulate the loan to the above client again. By such a method, the bank could cite a rapid increase in its new loans. But the illegal practice was hard to investigate because the state-owned banks enjoyed close relationships with local banking regulators, said a source from China Merchants Bank.
Original article: [Chinese]

Invisible salesman
Industry, page 33
Against the backdrop of a modest rally in China's real estate market, some Chinese property developers have coined bizarre methods to promote their apartments sales. Some were hiring post-graduate students to pretend to be home buyers, which could lure real buyers in. Such workers were paid 50 yuan for three-hours of work in the morning and given a free lunch. Other property developers hired eloquent middle-aged women to mingle with prospective buyers and promote the homes. Perhaps, to a small degree, such methods were working - the EO learned that at a recent real estate fair in Beijing, some 437 apartments worth 500 million yuan were traded, or 36% more than the same period last year.
Original article: [Chinese]