Highlights from the Economic Observer print edition, May 4 2009

Telecomm Merger Slipped Past Antitrust Law
Cover
*The merger between China Unicom and China Netcom last October met requirements for antitrust review, but officials say that no such review ocurred.
*Since China's new antitrust law came into effect last August, many mergers of state-owned enterprises have passed thresholds for antitrust review but have not been reported to regulators.
*China Unicom and China Netcom did not respond to requests for information by the EO
Original article: [Chinese]

Xiao Shiqing: Under Investigation
Cover, News
*Xiao Shiqing, president of China Galaxy Securities Company (CGSC), a securities brokerage firm, was arrested by police and his office sealed for investigation on April 29.
*Sources told the EO that Xiao's investigation stemmed from corruption allegations.
*On April 30, the broker's parent firm released a statement saying Xiao had resigned his post and was involved in an investigation in personal issues.
Original article: [Chinese]

China Encourages Domestic Firms heading Abroad
News, page 5
*China would formulate more favorable policies to encourage private firms to head abroad.
*The EO learned the Ministry of Commerce was coordinating with the Ministry of Finance, the China Banking Regulatory Commission, The Export-Import Bank of China and All-China Federation of Industry and Commerce to develop policies to encourage private domestic firms to expand overseas.
*The policies included allowing private firms to borrow money from banks via mortgaging foreign assets, equities and mining resources and establishing a special private equity fund, sources told EO.
Original article: [Chinese]

Shanghai: Looking for New Growth Engine
Nation, page 9
*Shanghai was looking for a new growth engine after having seen little of the country's investment recent spree.
*Despite this, officials said they were still committed to building Shanghai into an international financial center and shipping center in the future.
Original article: [Chinese]

Temasek Kick Off Micro-credit Business in China
Market, page 17
*Temasek Holdings, an investment arm owned by the government of Singapore, has begun dealing with micro-credit services in Chengdu, the capital of China's southwestern Sichuan province.
*Early this year, Fullerton Financial Holdings, a subsidiary of Temasek Holdings, set up Fullerton Credit Services Company in Chengdu to provide small loans to local merchants in a wholesale market where daily transaction volume surpassed ten million yuan.
Original article: [Chinese]

China's Gold Reserves Increases
Market, page 19
*China's central bank has purchased 454 tons of gold for reserve since 2003, said Hu Xiaolian, the bank's vice-president in late April.
*China's gold reserves have reached 1,054 tons.
*Sources close to the State Administration of Foreign Exchange told the EO that 700 US dollars per ounce was the ceiling price during the recent round of gold purchases.
Original article: [Chinese]

Local Governments and Auto Companies Battling Over New-Energy Car
Industry, page 33
*Several Chinese cities would participate in a trial procurement of 1,000 new-energy cars, with the Ministry of Science and Technology and three other ministries drafting a list of vehicle models for purchase, in part to prevent protectionism or favoring of local brands by governments.
*Only cars on the list would qualify for government subsidies of procurement.
*Thirteen cities, including Beijing, Shanghai and Chongqing, were already slated for involvement in the trial. Previously, most of the new-energy cars they had procured came from local auto companies.
*Without an open public bidding process, many experts fear that the new-energy car campaigns would give rise to regional protectionism.
Original article: [Chinese]