Highlights from the EO print edition, issue no. 436, September 14, 2009

Lenovo: Another Step Towards "Privatization"
News, cover
~ Legend Holdings, parent firm of Lenovo Group - the world's third largest laptop maker - welcomed the private firm China Oceanwide Holdings Group (COHG) as its third largest shareholder, after the company acquired a 29% share of Legend Holdings.
~ This means that 64% of Legend Holdings' shares no longer belong to the state.
~ Chinese Academy of Sciences Holdings Company, a wholly state-owned firm which used to own a 65% stake in Legend Holdings, has now lowered their investment to a 36% share.
~? Legend Holdings' Employees Shareholding Society acquired the remaining 35% stake in the company.
Original Article: [Chinese]

Roll Out of Low-income Housing Faces Delays
News, page 3
~? The Standing Committee of National People's Congress, has warned local governments to be more vigilant when handling government-subsidized housing projects aimed at benefiting low-income urban residents.
~ Unrealistic construction plans, lack of supporting capital, delayed construction, along with excessively-high construction standards, are just some of the problems that have plagued local low-income housing projects over recent months.
~ Due to the above problems, it's unsure whether the swathe of government-subsidized housing projects originally scheduled to be completed this year will be finished in time.
Original Article: [Chinese]

China Looks to Attract More Foreign Investment
News, page 4
~ The Ministry of Commerce will formulate new policies to stabilize foreign investment according to statements made by an official from the ministry recently.
~ The changes are likely to reflect suggestions made by the Ministry of Commerce, in conjunction with other related ministries, that were recently submitted to the State Council.
~ At the start of 2009, China repealed many of the tax breaks that it had offered to foreign investors, although some preferential policies still exist in Central and Western China.
~ Along with adjusting the tax incentives, the ministry also wants to focus attention on attracting foreign investment into high tech industries.
Original Article: [Chinese]

Looking Ahead to the 2010 Iron Ore Negotiations
News, page 5
~ The 2010 international iron ore price negotiations normally start in late September or early October every year.
~ During the 2009 negotiation, the China Iron and Steel Association (CISA) has only signed a half-year contract with FMG, a minor player in the iron ore trade, which did little to re-shape the long-time iron ore pricing system.
~ Goldman Sachs has predicted the contracted iron ore prices will rise 10% between 2010 and 2011, due to recovering world trade and increased demand from China.
~ China is attempting to turn to alternative small-scale suppliers to replace the three international mining giants' (BHP-Billiton, Rio Tinto and Vale), however, as these smaller mining companies only account for only 30% of global iron ore supply, it's doubtful whether this plan will succeed.
Original Article: [Chinese]

Summer Davos: Green Economy - Green Recovery
News, page 7
~ One of the most discussed topics at this year's Summer Davos?or "Annual Meeting of the New Champions", held in Dalian last week, was the future of the Green Economy.
~ At one closed session of the world-famous talk fest, representatives from Chevron and Beijing Capital Group discussed the future of the Green Economy and the prospects of a green recovery.
~ Discussion focused on what steps business and governments could take to nurture the growth of green industries.
Original Article: [Chinese]

Visa Blocks Overseas Expansion of China UnionPay
Market, page 17
~ Visa has decided it will no longer allow China UnionPay to use its credit payment system as the latter has already made great inroads outside of China.
~ The EO learned that as early as in April, Visa requested banks only recognize the Visa logo when consumers used credit cards which were tagged with both the China UnionPay and Visa logos.
~ In order to become available abroad, China UnionPay credit cards are usually affiliated with either Visa or MasterCard.
~ The EO learned that Visa usually charges users special fees for currency exchange services when they make cross-border transaction. However, such fees were free of charge for users of China UnionPay credit cards, which has led to more customers choosing to use China UnionPay.
Original Article: [Chinese]

JP Morgan Establishes Office in Chengdu
Market, page 20
~ On Sep 10, JP Morgan Bank (China) Limited Corp. announced the opening of their Chengdu branch, their fifth in China.?
~ The new branch will focus on wholesale financing and other services such as cash management of Renminbi and foreign currencies, trade financing, liquidity management, risk management, foreign exchange transactions and invest banking.
Original Article: [Chinese]

China Audit Body Examines Provision of New Loans
Market, page 21
~ China's National Audit Office (NAO) has dispatched working teams to Chinese banks to audit the new loans issued in the first eight months of this year, the EO learned.
~ A source close to the NAO said "Serious problems have been found in the paper financing, moreover, land financing projects, which are guaranteed by some local governments, have been found to be in violation of state regulations."
Original Article: [Chinese]