Issue Wrap No. 513, Apr 4, 2011

By English Edition Staff
Published: 2011-04-02

Highlights from the EO print edition, Issue Wrap No. 513, Apr 4, 2011

Questions About the Tianjin Precious Metal Exchange
News, cover
~ There are numerous questions that remain unanswered about the Tianjin Precious Metal Exchange.
~ While still limited to "experimental operations," tens of thousands of investors have already begun trading on the exchange and after only 13 months of operation, trading volume has already reached 280 billion yuan.
~ Though it claims to operate a "globally innovative" trading model, 90% of its customers are actually suffering losses.
~ Also, despite claiming to pursue "financial innovation," its market makers play little role in price-settling.
~ Additionally, the EO has discovered that, among four of its major shareholders, the addresses used by three of them on the official registration documents don't actually exist.
~ Aside from the problems outlined above, EO journalists also had troubles trying to establish who founded the exchange and also which institution is responsible for supervising it.
Original article: [Chinese]

Central Government Warns Rio Tinto Over Iron Ore Prices
News, cover
~ The central government is studying policies to deal with the rapid rise in the price of iron ore, indicating the issue may have become one of national strategic importance.
~ Possible measures that could be taken to reign in prices include encouraging steel enterprises to further their overseas operations, regulating iron ore import and export trade and conducting anti-monopoly investigations concerning international mining giants.
~ Special attention will also been paid to analyzing the array of new financial products related to the iron ore market.
~ One indicator of central government's tougher position toward this issue is that the National Development and Reform Commission (NDRC) recently warned Rio Tinto that the price of iron ore price is not simply a "market issue" and that prices for the commodity also directly effect the employment prospects of hundreds of thousands of Chinese people.
Original article:[Chinese]

NDRC Plans to Pilot Carbon Trading
News, page 4
~ Sun Zhen, deputy director of the climate department of the National Development and Reform Commission (NDRC), announced that during the period of the 12th Five-Year Plan, the NDRC would set up carbon trading platforms in some areas of the country.
~ The NDRC is also working on drafting policies related to both the establishment of these pilots and also those aimed at encouraging voluntarily emission reductions.
Original article:[Chinese]

Price of "Made in China" Products Set to Rise
News, page 7
~ China's export manufactures are entering an era of rising prices.
~ All the export-oriented manufacturers recently interviewed by EO have admitted that this year, they plan to lift their prices by between 10 to 15%.
~ The pressures on prices is coming from higher labor and materials input costs. The appreciation of the RMB has also added pressure on prices.
~ The big question that remains is will the rise in prices lead to a loss of market share?
~ Some indicators that it won't, include the difficulty that customers have in locating alternate suppliers.
~ Also, many people view the current difficulties as a temporary lull and believe that export-oriented trade will pick up again soon.
Original article:[Chinese]

Taizhou Lead Poisoning Case
Nation, page 9
~In mid-march, in what was the most serious case of heavy metal pollution in Zhejiang in recent years, a battery company was found to have caused lead poisoning among 168 villages in the city of Taizhou.
~ A number of heavy metal pollution incidents in Zhejiang have been linked to the scrap metal industry.
~ Taizhou is said to earn more than 20 billion yuan a year from the industry, but the rich profits come at enormous environmental and health costs.
~ Over the long term, the scrap metal industry is said to have caused soil pollution, which seriously threatens the health of local resident.
~ Lax implementation of environmental standards is also one of the reasons for the tragedy.
Original article:[Chinese]

Whither Bank Stocks?
Market,page 19
~ China's listed banks have just released their annual reports showing that 2010 was another good year for profit growth - but these good results are not being reflected in their share market value.
~ To hold or sell bank shares has become the big question for investment managers.
~ The analysts and fund managers who advocating selling bank stocks, think that banks don’t have a high expected yield, and their financing situation is still tight, plus their not optimistic about the outlook for inflation.
~ Other bears say that a gradual tightening of monetary policy will lead to a decline in bank stocks over the course of the year.
Original article:[Chinese]

Corn Seed Controversy
Corporation, page 25
~ In March, the ministry of agriculture issued a list of 26 corn varieties that it recommended farmers plant, but one of the most popular variety of corn, "Xianyu 335" was not included on the list.
~ No one would give a clear explanation of why "Xianyu 335" was not included on the list.
~ People were left to assume that the government chose not to recommend the variety, due to it being related with a genetically modified variety.
~ The ministry of agriculture has since made a clarification that "Xianyu 335" is not a genetically modified variety.
Original article:[Chinese]