Highlights from the EO print edition, issue no. 445, November 23, 2009

Sinopec Under Pressure from Private Competitors in Retail Market
Cover
~ Just two days after the NDRC announced another increase in fuel prices in line with the country's new pricing system, Sinopec decided to cut the price of petrol and diesel at certain service stations across the country.
~ The move was in response to strong competition pressure from private gas stations, which have witnessed a rapid expansion in the wake of the global financial crisis.
~ Over the past year, about 20,000 private gas stations have opened in regions that were previously dominated by Sinopec.
~ Currently, Sinopec's market share in the north, east and south of the country has registered a 10 percent drop from 60 percent to 50 percent.
Original Article: [Chinese] 

Commercial Banks to be Allowed to Invest in Insurers
Cover
~ Commercial banks will be given the green light to invest in insurers by the end of this year, though every commercial bank selected to take part in a pilot program, will only be permitted to invest in a single insurance firm.
~ The Regulations on Piloting Commercial Bank Investment in Insurance Companies, co-drafted by the China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC), outline the various requirements of commercial banks wishing to invest in insurance companies: management structure, internal-control mechanisms, systems of risk management, business revenue and capital.
Original Article: [Chinese]
 

The Currency Dam Holds: Battle for the RMB Exchange Rate
News, page 3
~ On November 18, the day Obama concluded his visit to China, the price for one-year Renminbi non-deliverable forward contracts fell back to 6.6230. Five days before, expectations that a shift in Chinese currency policy was imminent had pushed the indicator to a 15-month high of 6.5865.
~  The pressure to revalue had been building since October with inflows of  hot money, commentary from influential journalists and Nobel Prize winners and pressure from various areas of American government to declare China as a currency manipulator all weighing in as factors.
~ Foreign bank's were also factoring RMB appreciation into their long term predictions and new wording in a People's Bank of China report also led to expectation of a imminent rise in the value of the currency.
~ UBS economist Jonathan Anderson, also argued that China would need to revalue the yuan if they wanted to increase domestic demand and reduce China's high savings rate.
~ Although the immediate pressure to appreciate the RMB  has now receeded, pressure will continue to persist in the medium term.
~ Although not everyone agrees, the market appears to be factoring in a RMB appreciation in mid-2010 assuming that economic growth and exports continue to strengthen.
Original Article: [Chinese] 

Ministry of Commerce Backs New International Design Centers
News, page 4
~ The Ministry of Commerce will support the establishment of five international design centers in Wenzhou, Shanghai, Dongwan, Xiamen and Chengdu.
~ The new centers are aimed at helping shift the nature of manufacturing in China from being restricted to the production of unbranded basic components to one in which more products are designed and eventually branded here in China.
Original Article: [Chinese] 
 
Local Consumer Associations Seek Official Status
News, page 5
~ Local level consumer associations, which have existed for over 20 years, are calling for more official recognition and to be registered as public institutions.
~ By gaining recognition, their staff will be able to enjoy the same treatment as public servants.
~ The EO learned that 10 cities and provinces including Shanghai, Zhejiang, Fujian, Guangdong, Guangxi, Sichuan, Chongqing, Hainan, Hunan, Hubei have changed the name of their local consumer associations into consumer rights protection commissions. Such a move is likely to assist them in gaining approval from local people's congress.
~ At present, local consumer associations are attached to their corresponding commerce and industry administration at the local level. A source from a local consumer association said after being integrated into the government bureaucracy, the association would gain more power and would be better able to protect consumers' interests.
~ However, some experts opposed the association's administration-oriented reform -arguing that there is no reason why they would have more effect as a government body and also that consumer rights groups should maintain a distance from the official bureaucracy.
Original Article: [Chinese]

Enterprises Team up to Tackle Trade Protectionism
News, page 6
~ China is mulling over new strategies to approach the threat of trade protectionism around the world.
~ "Don't be afraid, just respond to the case!" the CEO of a company who produces a protecting-agent for tyres said. His company has just won a case against an American counterpart who claimed the Chinese firm had infringed its intellectual property rights.
~ The Ministry of Commerce has suggested all tyre exporters across the country form a union, so they will be more confident and powerful when tackling trade protectionism.
Original Article: [Chinese] 

CIC Rumored to be Seeking an Injection of Another 200 Billion US Dollars
Market, page 22
~ With 50 billion US dollars worth of funds remaining on the books, the China Investment Corporation (CIC) is speeding up the pace of its investments in overseas companies.
~ It's rumored that it has planned to apply for another 200 billion US dollars after it's invested the remaining 50 billion.
~ The move would allow China to diversify its foreign exchange reserves
~ "With such a huge foreign exchange reserve, it's a tough job to maintain and appreciate its value," an official with the State Administration of Foreign Exchange said.
Original Article: [Chinese] 
 
Multinationals Want In on China's "Big Plane Project"
Company, page 25
~ Many overseas aircraft manufacturing giants like General Electric, Goodrich Aviation and Safran have been expanding their cooperation with Aviation Industry Corporation of China (AICC), a huge state-owned enterprise that dominates the country's aircraft manufacturing industry.
~ The foreign firms appear to be interested in taking a share of the profits in the country's "big plane project".
~ China is encouraging enterprises that want to apply for a contract to manufacture the engines and aviation system for the new planes, to team up with Chinese partners, noting that preference will be given to such cooperation when deciding on who is awarded the project.
~ Over the next 20 years, China is expected to build 2,355 C919-type jets.
~ The project was led by Commercial Aircraft Corporation of China, in which the AICC has major business interests.
Original Article: [Chinese]