Issue Wrap No. 517, May 2, 2011

Highlights from the EO print edition, Issue Wrap No. 517, May 2, 2011

NDRC Price Department Meet With Business Representatives to "Discuss" Prices
News, cover
~ The meeting rooms at the offices of the National Development and Reform Commission (NDRC) have been fully booked these past few weeks as the body's Department of Price invite representatives of various business groups over for a chat to talk about the important issue maintaining price stability.
~ An official with the NDRC told the EO that its appropriate to refer to these kinds of meetings as informal discussions.
~ Under pressure from the State Council to keep a lid on inflation expectations, the NDRC has been doing everything within (and sometimes beyond) its power to contain prices.
Original article: [Chinese]

Ministry of Commerce to Shift Focus
News, page 2
~ The EO has learned that the Ministry of Commerce has already completed the outline for a variety of special projects that are to be completed as part of the department's 12th Five-year Plan.
~ There are three major differences between the department's previous policy goals and those outlined in the new plans.
~ The first shift is a move from a focus on rural consumption, which first emerged in the wake of the financial crisis, to urban consumption as a driver ofd growth.
~ Secondly, the strategy of "going global" will have a regional "going Asia" focus.
~ Finally, with China becoming a focus of more and more protectionist measures from abroad, the Ministry of Commerce hopes to push forward with efforts to sign multiple free trade agreements (FTA) with trading partners - especially large developing countries. The ministry will also focus on increading the size of the country's gross national profit or GNP.
~ Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, said that "We have now come to realize the importance of GNP, as it stands for sovereign wealth. We can recall our overseas investments when we need them as this kind of money is very flexible and easy to control. The real purpose of strengthening investment and cooperation in the frame of FTA is to make part of the profits from the overseas areas."
Source:
Original article: [Chinese]



From Field to Market - What Sets the Price of Cabbage in Beijing?
Nation, page 9
~ Though going rate for a kilogram of cabbage from a farmer in Jiangsu's Pei County is 0.14 yuan, wholesalers in Beijing pay 0.64 yuan a kilo before selling it to retailers for 0.8 yuan a kilo who in turn sell it at Beijing markets for more than 1.2 kuai a kilo.
~ The complicated logistics of transporting vegetables to Beijing accounts for most of the mark up.
~ The farmers who actually grow the vegetables don't get much of a cut, retailers, who have a hand in setting prices, are much more willing to raise prices than they are to lower them when wholesale prices retreat.
Original article: [Chinese]

MIIT Encourages Foreign Investment in Agricultural Equipment and Farm Machinery
News, page 5
~ Details of what special restrictions would be placed on foreign investment in China's agricultural equipment sector that appeared in a draft version of industry guidlines over the coming 5 years, have been deleted in the final version that was published recently. The omission of the special conditions indicates that Chinese authorities will treat foreign and domestic investment in the sector on an equal footing.
~ Foreign firms have taken a large share of farm machinery market in recent years and will take more as they expand by merging with acquiring Chinese firms.
~ These companies are also seeking to have their products included on a special list of equipment which the central government is willing to offer farmers a 30 percent subsidy on if they purchase the items.
~ Some people inside the industry express their worries that a lack of domestic strength in the agricultural equipment industry combined with the lack of any favorable policies, may lead foreign firms dominating the market.
~ However, the official document also include an ambitious plan that includes the establishment of 5 large domestic, globally-competitive companies with annual revenue of over 15 billion yuan and capable of exporting 12 billion yuan worth of agricultural equipment a year.
Original article: [Chinese]