No. 383 Sept 1

Hotel Industry Loses Out to Olympics
Cover story
Beijing's hotel industry was plagued with dissapointing occupancy rates during the Olympics. One high end hotel, which had increased its room rates three to four times the norm in preparation for the Olympics, only saw a 60% occupancy in the week after the opening ceremony. Only after bringing rates down again did occupancy rise to 80%. "It was so different than I imagined," said the hospitality investor who backed the hotel. Higher-end hotels near the Olympic venues fared better than others, with some hotels on the outskirts experiencing heavy losses after investing much into pre-Olympic renovations.
Original article: [Chinese] 

Value-added Tax Reform Likely to Take Effect Next Year 
News Page 3 
According to a Finance Ministry impact assessment, the value-added tax cut slated to come into effect on January 1 2009 is estimated to cause a national revenue loss of 150 billion yuan. The reform will cancel a VAT tax on investments in new equipment for businesses in all but state-protected industries.
Original Article: [Chinese] 

New Financing Channel for SMEs
News page 5
The Chinese Central Bank would launch a pilot project to allow small and medium enterprises (SME) to raise funds through short-term financing bills. The EO has learned that some 22 banks and 44 enterprises were involved in the project, of which the total amount issued would reach 3.5 billion yuan.
Original Article: [Chinese]

Scrambling for Grass-roots Grain Depots in China
News page 6
A great number of grass-root level grain depots still remained in the hands of local government, despite that only four months were left the deadline for liberalization of the grain purchasing market, part of a reform first launched by the State Council in 2004. Foreign-funded companies have tried to purchase these local grain depots, but as one official from a state-owned grain enterprise in Jilin province told the EO, there was concern that once the system became market-oriented, foreign companies would likely gain control of grain sources and jeapardize Chinese food security.
Original Article: [Chinese]

Reform Pilot Gives Power-up to Anhui Counties
Nation page 9
A pilot project in Anhui province that granted Wuwei and twelve other counties the same powers as city municipalities under the province has boosted their GDP, according to a mid-term evaluation. Since May of 2007, the counties have been given greater autonomy in 140 areas including taxation, budgeting, statistics gathering, and land use. Under the old system, cities under financial duress would pass the buck to counties they governed through administrative collection.
Original article: [Chinese]

Super Girl, Chinese Government Edition?

Nation page 14
Zhuzhou city in Hunan province has used a format reminiscent of the popular Supergirl television talent contest to build a civil servant talent pool. After public applicants were vetted by interviews, written tests, and four other trials set by a special group devoted to the project, a final list of 100 winners was compiled. The list will be used to fill vacancies in local bureacracy on an ad-hoc basis according to the different experiences and skillsets of the winners. Those among the top ten in the list have the potential to be selected for high-level positions in local government.
Original article: [Chinese]

Sinopec: From One Pocket to the Other
Corporation page 25
Sinopec has reported that its expenditures have increased 70% in the first half of this year - but where exactly has all of that money gone to? The EO has learned that much of the increased costs have been shouldered by Sinopec's publicly-listed subsidiaries, which made purchases at premium prices from among the tight-knit group of companies also under the Sinopec banner. Said one manager in a Sinopec-run oil filed equipment company: "It's like putting money from one pocket into another."
Original article: [Chinese]