Survey Shows More Teens Have Sexual Experience

2009-08-01 10:02:23 Xinhua Web Editor: Zhang Jin

A recent survey found that 17 percent of students in polytechnic schools, aged 15 to 18, in Guangzhou of south China's Guangdong Province, had had a sexual experience, Saturday's China Daily reported.

The poll, conducted by Guangzhou Youth League School, also found that 8 percent of those females have been pregnant at least once.

The survey polled 500 students in three polytechnic schools in downtown Guangzhou.

"Polytechnic students don't need to prepare for the cut-throat college entrance examination as other high school students do. I think the ratio in polytechnics must be higher than other high schools," said Zuo Bin, a teacher with Guangzhou Youth League School and also the organizer of the survey.

The students who have sexual experiences are mostly those whose parents are divorced or too busy to take good care of their children, he said.

A large number of female students have sex to show their affection for their boyfriends and most of them do not use any contraception, which leads to a high rate of pregnancy among the female students who have had sexual experiences.

Zuo's viewpoint is advocated by many obstetric doctors in Guangzhou. "Our hospital always sees a surge of teenagers who come to have an abortion every summer vacation," said Song Luyin, an obstetric doctor with Guangdong Women and Children's Hospital.

"Some of them have come again and again for abortions, although we have warned them of the necessity to take contraceptive measures," she said. "I'm afraid their health will be harmed and their fertility influenced sooner or later."

The number of teenagers who have abortions probably exceeds 500 during the summer holiday. An official figure is not available.

Sex morality and sex responsibility should be included in adolescent sex education, in addition to physiological education and healthcare, said Tu Minxia, a professor with Guangzhou-based Guangzhou, Hong Kong and Macao Youth Research Institute.

Full article: http://english.cri.cn/6966/2009/08/01/1461s505786.htm

Steel makers striving for unified price

China Daily 2009-08-01 08:32 By Zhang Qi

China's steel industry association said on Friday that it plans this year to unify the spot and long-contract prices for the country's iron ore imports.

It will also set a ceiling for charges levied by import trading firms, as part of an effort to regulate the market.

The proposal was the top item of discussion at the steel industry body's two-day semiannual meeting, said Luo Bingsheng, deputy chairman of the China Iron and Steel Association (CISA), at a press conference.

The term prices negotiated with global miners should become a benchmark unified price, and the import agencies could charge 3-5 percent in commission on top of the term prices, Luo said.

The move aims to regulate excess iron ore import by steel makers and trading firms, which distorted the supply and demand balance and disrupted the annual contract talks, Luo said.

The price talks, which are continuing, appeared to be snagged on China's insistence upon bigger reductions than the 33 percent cut agreed to earlier with Japanese and Korean steel mills. News reports and industry analysts say China wants a 40 percent price cut.

Luo said foreign iron ore suppliers promoted massive sales on the spot market, leading to huge stockpiles.

Spot iron ore accounted for 82.7 percent of imports this year, leading to excessive imports that far exceed actual needs, the CISA said.

Luo made the remark as the spot price of iron ore in China surged above the contract prices offered by three large miners - Rio, BHP and Vale.

Benchmark spot prices of iron ore in China rose above $100 a ton on Thursday, as compared with $58 a ton in April, according to industry consultant Mysteel.

Iron ore imports rose 29.3 percent year on year, to 297 million tons, in the first half of this year, while traders imported 131 million tons, up 90.4 percent from last year.

There are 152 iron ore importers in China this year, exceeding the 112 licenses that CISA issued, the association said.

Luo said the annual talks were ongoing and CISA would keep working to push them forward.

"We are working for a reasonable result and hope to reach a win-win situation," Luo said.

"For small steel companies, a unified price system is definitely good news," said Fan Haibo, a steel analyst from Xinda Securities. "Large steel mills and trading companies have made huge profits by selling iron ore to small steel factories who do not hold import license."

"But how to define which firms have 'agent license' seems essential. Giving them the privilege is akin to guaranteeing a business always makes a profit," he said.

Full article: http://www.chinadaily.com.cn/china/2009-08/01/content_8502696.htm

Tsingtao Brewery Brewing Purchase of Baotuquan Beer

Source: Beverage World

Qingdao, China—Upon its statement made on July 29, Tsingtao Brewery Co. Ltd., the biggest beer maker in China, said that it would purchase a 100 percent stake in Baotuquan Beer from Tsingtao Group for CNY 9 million.

Tsingtao Group holds a 31.41 percent stake in Tsingtao Brewery now. After completing this deal, Baotuquan Beer will be wholly controlled by Tsingtao Brewery.

Tsingtao Group purchased Baotuquan Beer for CNY 250 million from Shandong Commercial Group on June 6, 2009.

Headquartered in the city of Qingdao, Shandong Province, Tsingtao Brewery's is mainly focusing on producing and distributing beer products. It has 53 breweries and one malting plant in 18 provinces, cities and regions all over China. The company operates under the brand name Tsingtao Beer. Its products have been distributed to more than 60 countries.

Full article: http://www.beverageworld.com/content/view/36557/173/

Summertime beauty Tao Hong

Sohu.com July 31, 2009

Top ten most beautiful churches in China

1. Beijing Eastern Church
In old times, a church was built in each cardinal direction in the city of Beijing, and the eastern one was Catholic East Church, or Wangfujing Catholic Church. Located in downtown Wangfujing Street, it is one of the best-preserved religious sites in the heart of Beijing. The church was first built in 1665 by two priests and underwent a latest renovation in 2008. Beside the church is a square of 1.2 hectares, where lush trees, grass and sparkling neon lights compliment the gorgeous building at night.
2. St. Sophia Church

The St. Sophia Church in Harbin is the largest Eastern Orthodox Church in the Far East region. It is 53.35 meters high and occupies an area of 721 square meters and displays typical Byzantine architecture. The building was first built by Russians for military use in March of 1907, and later was renovated into a wooden church. In November of 1996, it was listed as one of the key cultural relics under state protection. Half a year later, the Harbin city government repaired it and renamed it as Harbin Art Gallery.
3. Xikai Catholic Church

Located at the west end of Binjiang Street of Tianjin, the Xikai Catholic Church is the biggest Catholic Church in Tianjin. It is also called the "French Church" because it was first built by French bishops. With a height of 45 meters and an area of 1,585 square meters, it is a typical French Romanesque building that is now decorated and open to the public.


4. Xujiahui Catholic Church
Xujiahui Catholic Church is located at Puxi Street of Shanghai's Xuhui District. It is the largest Catholic Church in the city and China's first western style church. Done in a style imitating the gothic style of France in the Middle Ages, it was first built in 1905 and was at the time known as the number one architecture of Shanghai.
With red walls, white stone columns and slate roofs, as well as the two cloud-kissing bell towers that face each other, the Xujiahui Catholic Church has become an important building in Shanghai. As the church can hold 3,000 people, it has also been named the Vatican in Shanghai.
There are thousands of Christians in the area, so the church has to hold several masses in the early morning. On Sunday, the Christian holy day, the church hall is filled with people. The Xujiahui Catholic Church has been listed as one of the protected cultural heritage in Shanghai Municipality.
5. Shigulu Catholic Church

Located on Shigu Road in Nanjing, the Shigulu Catholic Church now is the only Romanesque architecture in the city. It was first built in 1870 by French priests and has been the office of Catholicism patriotic committee of Nanjing and Jiangsu Provinces since 1978. The church follows the form of an old European abbey and is a typical catholic church. It has been listed as one of the protected cultural heritage of Jiangsu Province.

6. St Michael's Catholic Church
St Michael's Catholic Church sits at Zhejiang Road, on top of a steep hill in Qingdao's old urban area. With an area of 2,470 square meters, it is the biggest gothic building in the city of Qingdao.
The bell tower of the church is 55 meters high and it has been the city's highest building for a long time. The windows of the church are covered by colorful glass patterns depicting stories from the Bible. The roofs and interior columns are painted yellow and white while the traceries and architraves are painted gold. The gorgeous church has been a popular place for young Catholic couples to hold weddings.

7. Shenyang Catholic Church
Shenyang Catholic Church, or Shenyang Nanguan Church, is located at 40 Nanlejiao Lu in Shenyang, the capital of northeast China's Liaoning Province. Following Renaissance architectural style, it is a typical gothic building and the Catholic center of northeast China. With a height of 40 meters and an area of 1,100 square meters, the church can hold 1,500 people at a time. The huge iron gate and the high walls that surround the church leave people with an impression of solemnity and serenity.

8. Sacred Heart Cathedral
Located on Yide Street in the center of Guangzhou, Sacred Heart Cathedral is the grandest and most characteristic church in Guangzhou. It has also been called "Stone House", as all of the walls and columns are made of granite. The church is an imitation of a European gothic cathedral and its tower spire reaches 58.5 meters. The atmosphere of the church can be compared to Notre Dame in Paris.


9.The Cizhong Church
The Cizhong Church is one of the few churches in Tibet that survived the Cultural Revolution. The church, built at the beginning of the 20th century, is a unique fusion of French and Chinese architectural styles. The overhanging eaves and roof of the church are Chinese style, while the cross on top is Western style. The Cizhong municipal government repaired the church in 1989 and then opened it to the public.

10. Yanjing Catholic Church
Yanjing Church is the only Catholic Church in Tibet. With an area of six square kilometers, it is located in Yanjing Village in Mangkang County of Tibet. Nowadays, 80 percent of Yanjing residents believe in Catholicism, and a Tibetan priest who is in charge of religious activities reads a Bible that has been translated into Tibetan.



CRI July 31, 2009

Former US Treasury Secretary Henry Paulson to advise US electric car firm on China links

China.org.cn by John Sexton July 31, 2009

Former US Treasury Secretary Henry Paulson has joined Coda Automotive, an electric car and battery company based in California, as an advisor on the company's Chinese partnership activities.

The startup company, based in Santa Monica, California, was launched in June 2009 to manufacture and distribute electric cars and battery systems. The company says it is aiming to avoid what it calls "the traditionally capital-intensive nature of the automobile business" by entering into flexible manufacturing partnerships around the world.

The company's first vehicle, the Coda sedan, will be delivered in 2010. It is based on the Saibao sedan made by China's Hafei Automobile Group (SHA: 600038). Coda has also signed an agreement to source lithium-ion battery packs from the Tianjin Lishen Battery Company.

While serving under former President George W. Bush as Secretary of the Treasury, Mr. Paulson led the US-China Strategic Economic Dialogue, a forum in which the two countries addressed areas of immediate and long-term economic concern. Before joining the government, Paulson was chairman and chief executive officer of investment bank Goldman Sachs.

"With extensive business and political ties to China, Mr. Paulson will be a valued asset as Coda continues to build global partnerships," said Kara Saltness, Coda's marketing director

Despite his reputation as a hard-nosed investment banker, the former Treasury Secretary is an enthusiastic environmentalist and belongs to number of conservation organizations. He has long been an advocate of immediate action to combat the effects of climate change.

"Coda's non-capital intensive business model and globally collaborative partnership strategy persuaded me to join the advisory board," said Paulson.

Another Coda advisor with strong political connections is Mr. Thomas "Mack" McLarty, a former Chief of Staff for President Bill Clinton. McLarty is president of McLarty Associates, a Washington-based consulting company, and CEO of a US auto retail chain.

Both Paulson and McLarty invested in Coda's Series B funding round in spring 2009.

Full article: http://www.china.org.cn/business/2009-07/31/content_18241890.htm

White liquor makers face profit squeeze

China Daily 2009-07-31 08:00 By Hu Yuanyuan

The government's decision to rework the alcohol taxation policy may lead to prices of white liquor going up in the next few months, according to industry analysts.

The situation has been such that people like Li Mu, manager of a Moutai franchiser in Beijing's Chaoyang district, have been pulling all stops to shore up their white liquor stocks before the new policy comes into effect since August 1.

"Though we haven't received any formal notice from the manufacturers about a price increase, they have stopped new supplies for more than 20 days now," said Li. "As far as I know, they may probably increase the price by 2 to 5 percent, while the top brands may see bigger price hikes."

Currently, the tax on white liquor includes the specific duty of 1 yuan per kilogram, and the 20-percent ad valorem duty on the factory price. According to the new policy, the government has changed the tax base and duties on white liquor while retaining the 20-percent ad valorem duties.

The new policy aims to tackle tax evasion by white liquor makers. Under the earlier dispensation, white liquor makers could avoid paying much of the tax by selling the product to distributors at low prices and then resell them to shops at a much higher price.

A senior executive of a liquor maker estimated that the consumption tax paid by each enterprise would probably double after the new policy is put into practice.

At present, consumption tax is less than 10 percent of liquor makers' sales turnover. The sales turnover of Wuliangye, a famous brand in the industry, was 7.93 billion yuan in 2008 and it paid 417 million yuan as consumption tax last year.

According to Hou Peng, analyst, Bohai Securities, the new policy will increase the financial burden of white liquor manufacturers and cripple their profits.

"Our calculation shows that the new taxation policy may lead to a 15 to 20 percent profit drop for listed companies," said Hou. "Higher profits mean higher taxes for liquor manufacturers," he said.

Li Hui, analyst, Southwest Securities, feels that the new policy may lead to a decrease in the retained profits of major white liquor makers.

"Among them, Wuliangye may face the biggest impact. Additional tax caused by the minimum taxable value may take up some 23 percent of its retained profits," said Li. "Other firms like Luzhoulaojiao, Swellfun and Kweichow Moutai are also expected to see their retained profits fall by 20 to 10 percent."

Increasing prices to transfer part of the financial burden to customers would be a natural choice for white liquor makers, Li said.

In the past two months, the retail price of Moutai has jumped to 660 yuan to 680 yuan per bottle in some shops, from more than 500 yuan two months back.

With demand still exceeding supplies, Li is worried that his existing stocks may hardly meet customer demands in September and October.

Full article: http://www.chinadaily.com.cn/bizchina/2009-07/31/content_8496973.htm

11th Chinese Int'l Beer Festival in Dalian opens

People take part in the opening ceremony of the 11th Chinese International Beer Festival in Dalian, a coastal city in northeast China's Liaoning Province, July 30, 2009. The 12-day 11th Chinese International Beer Festival kicked off here on Thursday, with the participation of more than 400 beer brands of over 30 Chinese and foreign breweries.

Full article: http://english.people.com.cn/90001/90783/91300/6715793.html

China to be next biggest diamond consumer

Source: Global Times [16:59 July 31 2009] By Liu Chang

In the first six months in 2009, diamond sales reached $300 million, putting China along with the US and Japan to become the three biggest diamond consuming countries.

The global economic crisis has resulted in a world-wide slow-down of diamond sales. From January to May, the diamond export and import volumes in the US and Japan have dropped by 49 percent and 24 percent respectively. China is the only country that has witnessed a growth in diamond consumption. Sales of the prized gem have increased 12.7 percent compared with the same period in 2008.

According to Liu Jianhua, an official from the Diamond Department of the Gems and Jewelry Trade Association of China (GAC), the annual diamond consumption in China has exceeded 25 billion yuan, and the figure is growing exponentially. Experts predict the diamond market in China is going to catch up with that of the US, and China is poised to become the next biggest diamond consuming country.

Wang Fei, researcher at the Cheungkei Research Center for Luxury Goods and Services (SITE) in the University of International Business and Economics, said that the rapid growth of diamond market is due to both supply and demand.

Diamonds, once a luxury rarely owned by a Chinese family, has now become a must for Chinese newlyweds. According to Wang, the largest population of diamond buyers is newlywed couples born in the 1970s and 1980s.

They are heavily influenced by western culture, where diamonds are seen as a token for love and loyalty. The second-largest customers are couples born in the 1960s who are financially more capable of affording a diamond than they were 20 years ago. The last group to buy diamonds are those who see the investment value in diamonds, which becomes clear in the economic downturn where currencies are depreciating faster than ever.

Although a rapidly growing market, Liu of GAC points out that the current diamond market is not a mature one, saying diamond consumption in China is still for sensational reasons. A true mature diamond market should be one driven by the diamond’s investment values, Liu said.

Liu also mentioned that there’s no leading brand in the Chinese diamond market which has nationwide recognition. Diamond enterprises are still limited to local markets. Brands such as Boee Jewelry and Diamond Charm, which are originally based in Shenzhen, are popular among the southern provinces in China, while Northern Chinese prefer brands like Caibai Jewelry, which is primarily based in Beijing.

Information about diamonds are not only limited to brands, Wang says. Diamond buyers are also said to be ignorant of the pricing system for diamonds, as well as the basic diamond evaluation standards, such as the 4 C standards (cut, color, carat and clarity). Wang believes the Chinese market is still a low-end market, where the customers have limited purchasing power.

Full article: http://business.globaltimes.cn/china-markets/2009-07/453389.html

Military reshuffle not likely: analysts

Source: Global Times [07:19 July 31 2009] By Kang Juan

Chinese experts yesterday refuted a report that the country's seven military command regions would be reshuffled into four “strategic zones,” saying the major reform remains at the discussion level because of impracticality and concerns of national stability.

The latest issue of The Mirror, a Hong Kong-based journal, reported that the Chinese military is preparing to reform the system of military regions, as the People's Liberation Army (PLA) marks its 82nd anniversary tomorrow.

According to an unnamed military source, the seven current military regions of Shenyang, Beijing, Lanzhou, Jinan, Nanjing, Guangzhou and Chengdu will be replaced with four strategic zones in the north, east, west and south, the report said.

Each strategic zone would be under the command of a military commission, formed by a joint command of different armed forces and several provincial secretaries in the zone, the source said, adding that the heads of the four military commissions would be assigned by the central authority in Beijing, responsible for the military actions and defense mobilization in the zones under their jurisdiction.

However, a military source who asked to remain anonymous told the Global Times that it was impossible for the Chinese military to carry out such a major reform this year, as maintaining stability is the top priority.

“The main tasks for the Chinese military so far are to maintain stability along the borders and prepare for the military parade on National Day in October,” he said. “Whether and how to carry out the military reform has been discussed among the academics for almost 30 years, but no answers have been reached yet.”

Li Daguang, a military expert at the University of National Defense, ruled out the possibility of any immediate adjustment in the allocation of military regions.

“Relevant discussions have been ongoing for several years. But none of the proposals are mature enough,” Li told the Global Times, citing the complexity of reforming the system.

“The existing system has been in accordance with the national defense situation of China, which pursues a national defense policy that is purely defensive in nature,” Li argued.

The 2.3 million-strong PLA, under the top command of the Central Military Commission, oversees seven military regions nationwide as administrative headquarters responsible for making plans for troop development, commanding joint operations of different armed forces and guaranteeing joint logistics in several provinces.

Chen Zhou, a researcher with the Chinese Academy of Military Sciences, noted that the division of China's military regions is based on administrative divisions, geographic locations, directions of strategic campaign and combat missions.

“The allocation of military regions usually changes with the troops' development and domestic and external environments,” Chen noted.

In private talks, military personnel were often heard talking about the urgency of a reform, as the current divide of seven military regions “appears to be redundant,” and “not up to the demand of modern military mobilization or deployment.”

The views were reflected in heated discussions among military aficionados on the Internet. A Web user wrote on a military forum that the army has been the main decision power in each military region, while the navy and air forces were always sidelined, which the user said isn't good for the military modernization of China.

Some Web users also doubted the efficiency of the division system, as the coordination among several regions is quite inconvenient.

However, military insiders told the Global Times that a major reform is hard to formulate, as the combination of some regions will mean the move of too many personnel and facilities, which might cause problems.

There have been several adjustments in the division of military regions since the foundation of the People's Republic of China.

Originally, six military regions were established in 1950. That number rose to 13 in the late 1950s and was reduced to 11 in 1968. Mao Zedong, the former leader of China, decided to exchange the positions of commanders in eight military regions in 1973. The current divide of seven regions dates back to 1985 when the country initiated a major demobilization of a million servicemen.

In another development, the official bilingual website of the Ministry of National Defense (MND) is expected to launch tomorrow, on the Chinese Army's 82nd birthday. The site is meant to be a channel for China to express and elaborate its military policy and release information of activities.

Admiral Timothy Keating, commander of the US forces in the Pacific region, praised the move Tuesday.

“This goes with our desire for more transparency and better understanding of Chinese military intentions,” Keating said.

On Tuesday, the military also offered 90 foreign journalists a visit to its Third Guard Division, a motorized infantry force that safeguards Beijing. The move was interpreted by Reuters as China's military cautiously trying out new openness.

Rear Admiral Yang Yi, a senior military expert at the University of National Defense, said the army is displaying increased confidence, transparency and openness by a series of military exchanges and diplomatic activities.

“It is conducive for China to convey its message of peaceful development and gradually dispel concerns about its military intentions from its Asian neighbors and Washington,” Yang said.

Full article: http://www.globaltimes.cn/www/english/military/china/2009-07/453067.html

Summer Music Event Lands on Scenic Grassland

2009-07-31 16:54:02 CRIENGLISH.com Web Editor: Ma Ting

InMusic Festival is scheduled to open on August 7 in the Zhangbei pasture resort in north China.

It will be the coolest live music experience of the summer. This year's InMusic Festival is scheduled to open on August 7 in the Zhangbei pasture resort of north China's Inner Mongolia Autonomous Region.

60 top bands and artists - covering rock, pop, folk, electronica, metal and hip/hop - from both home and abroad will show up at the InMusic Festival.

In the spotlight will include Chinese mainland pop/rock singer Xu Wei, Taiwan's indie-pop songstress Deserts Zhang and British trip-hop musician Tricky. Other well-known bands also include New Pants, Brain Failure and Miserable Faith.

It is said that Cui Jian, the rock pioneer on the Chinese mainland, and other industry moguls will be present at the music festival.

Though this is its first run, the InMusic Festival boasts the largest outdoor music event so far in China with the venue equating to two and a half times the size of Tian'anmen Square.

Launched by leading music magazine InMusic, the InMusic Festival will run for three days until August 9.

Full article: http://english.cri.cn/6666/2009/07/31/1722s505579.htm

Porn Charges Squeeze Google's China Engine

07-31 14:53 Caijing By staff reporter Ming Shuliang

Google.cn has restored its "suggest search prompt" function, but the search services for foreign sites are still unavailable.

A dispute with Chinese authorities over allegedly pornographic content could slow down the pace of growth in the country for Google but won't change its search engine strategy, telecoms research firm Analysys International Consulting analyst Li Zhi has told Caijing magazine.

Google.cn, Google's portal in China, has restored its "suggest search prompt" function, but the search services for foreign sites are still unavailable. Chinese authorities in June ordered the search engine to suspend both functions and block what the country said was pornographic and vulgar content.

The "incident" will affect advertisers' decision-making because it damaged Google's brand image, Li said.

Beijing-based China Intelli Consulting Corp. president Lu Bowang said the dispute had no substantive impact on Google's fundamentals in China.

"Google's products are fine and the government's action is not a result of product defects," said Lu.

The marketing manager for computer maker HP Personal Systems Group, Jin Yinghui, told Caijing he wouldn't reduce his Google advertising budget.

Jin explained HP pays Google only if people click on its ads and occasional inability to access Google in China does not matter much. But he did say he would pay close attention to any change in Google's market share.

Li Zheng, online marketing director at China's online travel service provider eLong.com, told Caijing some advertisers have to use Google or Baidu, because the market share of their common rival Yahoo! is shrinking and Microsoft's Bing is still in the testing stage.

Shi Jingsong, marketing director of Hylink Advertising Co. Ltd., told Caijing the dispute has had no big impact on Google's advertising business in China and no advertisers had changed their placement plans so far. However, he said, some advertisers -- especially state-owned enterprises -- would be more cautious about advertising on Google.

Kai-Fu Lee, president of Google China, called the dispute "the most serious crisis" since the launch of the Chinese-language version of the search engine in 2006.

The company still faces possible regulatory action.

Full article: http://english.caijing.com.cn/2009-07-31/110219099.html

Buffett Completes 10% Stake Purchase in China's BYD

07-31 15:24 Caijing By intern reporter Wang Zhen

Buffett has earned a HK$ 7.6 billion paper profit from an investment it agreed to make in Chinese carmaker BYD last September.

Warren Buffett's Berkshire Hathaway Inc. has completed the purchase of a 9.89 percent stake in Chinese electric car manufacturer BYD Co., after winning approval from the China Securities Regulatory Commission, BYD said in a statement filed with Hong Kong stock exchanges on July 30.
Berkshire's subsidiary MidAmerican Energy Holdings agreed to buy 225 million of BYD’s Hong Kong listed shares for HK$ 8 apiece last September, totaling HK$ 1.8 billion. While waiting for regulatory approval, the automaker has jumped fivefold in trading since the deal was announced. Based on the July 30 stock price of HK$ 41.65, Buffett’s Berkshire has earned a HK$ 7.57 billion paper profit from the investment.

Under the deal, MidAmerican Energy will hold a 9.89 percent stake in BYD and appoint its chairman David L. Sokol as a non-executive director of the automaker.

After the transaction, BYD's registered capital will increase from 2.05 billion yuan to 2.28 billion yuan.

Wang Chuanfu, chairman of BYD, said last year that the partnership with MidAmerican would help BYD's products and technologies reach deeper into the global market.

MidAmerican Chairman David Sokol said that "as worldwide discussions relating to global climate change and environmental respect continue, the technologies being developed by BYD will be an integral part of the future."

As China's largest maker of battery and electric vehicles, BYD is planning to sell hybrid cars in the U.S. as early as 2010; as of last December, it has already started selling the F3 DM, the world’s first mass-produced plug- in hybrid.

Backed by the government’s support of new energy vehicles, BYD has expanded rapidly in the sector. On July 26, BYD announced that it would buy 100 percent of Hunan Midea Coach for 60 million yuan, signaling plans to expand into the alternative-fuel bus market. The company also plans to build a plant in Changsha, the capital city of Hunan province, intending to produce up to 400,000 alternative-energy-powered buses and coaches per year.

With new models and an increase in exports, the Shenzhen-based company said it aims to more than double vehicle sales this year to 400,000. According to the China Association of Automobile Manufacturers, BYD's first-half sales more than doubled to 176,814.

Full article: http://english.caijing.com.cn/2009-07-31/110219115.html

Beijing Policy and Running with the Bulls

07-31 15:59 Caijing By staff reporters Qiao Xiaohui and Wang Xiaolu

Government regulators used policy initiatives to stimulate this year's stock market rallies. But what's the long-term cost?

Regulators turned cautious toward China's rising A-share stock market in early July, when a new rule from the China Banking Regulatory Commission (CBRC) prohibited banks from tapping wealth management funds for stock investments. Moreover, mutual funds were told to stop dabbling in equities.

Another cautious step came July 9 when the People's Bank of China announced it would issue one-year notes, signaling a mild adjustment in monetary policy.

And a few days later, CBRC ordered the semi-official China Securities Depository and Clearing Corp. to cease opening securities trade accounts for trust companies, effectively barring the use of trusts to buy stock through initial public offerings.

But Beijing was only tapping the brakes. The government tone changed – and pleased stock market bulls -- a few days later when, at an economic conference, Premier Wen Jiabao said the government should stick to "a proactive fiscal policy and a relatively relaxed monetary policy."

The premier's message encouraged investor optimism. So after a brief respite while regulators played the caution card in early July, the bull runs resumed on the Shanghai and Shenzhen stock markets.

By mid-July, the market indexes reached their highest levels in a year on rising trading volumes. The Shanghai Composite Index closed at 3188.55 on July 15, while the Shenzhen index finished at 1,307 points.

Once again, government policy had moved the markets.

Institutional investors played the bull market aggressively – and successfully. Lipper, a Reuters fund research company, reported equity fund earnings rose 50.67 percent during the first half of the year. China's QFII funds for foreign investors soared 62.79 percent.

Private funds scored higher returns than public funds; many posted yields exceeding 100 percent. Some investors turned more cautious after the Shanghai index hit 3,000, a public fund manager said, but few expected the market to fall.

Savings accounts have been tapped for stock purchases by investors trying to stay a step ahead of what many see impending inflation. Deposits in standard bank accounts rose faster than savings account deposits in June.

A CICC strategy report July 6 said the change in savings deposits deserved more attention because, if the trend continues, stock indexes can be expected to soar.

Behind the Numbers

Fundamentals can shed some light on current market behavior, said Yu Jun, executive general manager for research at CITIC Securities. He said producer price indexes were still in negative territory even though macroeconomic conditions turned better in the first half of the year – an indicator that industrial product prices had bottomed out and mid-tier companies were unlikely to post better financials this year.

A report by Wang Tao, chief China economist for the investment bank UBS, said the Chinese government would likely discontinue its economic stimulus programs soon. But she argued Beijing would not overhaul current macroeconomic policy due to concerns that export trade and the global economic outlook are still, by and large, grim.

Indeed, as Wang's comments indicate, the central government's policy orientation has become a key focus for market watchers. Some worry the wrong policy could end the current rally.

But so far this year, government policy has encouraged market growth. Regulators recently gave a green light to resuming IPOs but initially chose to allow new stock offerings in three growth sectors, excluding blue chip companies. The amount of money to be raised in each IPO was to be less than 1 billion yuan.

After that market test, regulators opened doors to bigger deals. They approved Chengyu Highway for an IPO on the A-share market to raise 1.7 billion yuan. Later, blue chip giant China Construction Corp. got regulatory approval to raise as much as 42 billion yuan. In addition, regulators lifted a 10-month suspension on corporate bond sales.

An investment banker told Caijing that regulators decided to control the financing pace out of concern that stock prices would start slumping. IPOs, they reasoned, would encourage a secure market.

Guilin Sanjing (SZSE: 002275) opened on its IPO debut July 10 at 32.50 yuan, up 64 percent from the initial offer of 19.80. The stock soon soared to 39 yuan, hitting the daily limit. Likewise, Zhejiang-based Wanma Cable (SZSE: 002277) opened at 22.50 yuan, up 95 percent from its offer, before rising another 20 percent that day.

"Controlling the pace and scale of IPOs results in market demands outstripping supply," said an investment bank source. "This is a natural outcome."

Policy Phenomena

Where will the A-share index go next? The answer is tied to monetary policy.

"We don't worry that market prices will slump in the third quarter," said a private equity fund manager. "As for the fourth quarter, it will require some observation. But, personally, I am more pessimistic about next year."

As of July 14, a total 267 out of 769 companies that list on the Shanghai and Shenzhen exchanges reported improved financials for the first half of the year. Another 31 companies said they expected to remain profitable.

Gui Gaoming, chief analyst with Shenyin Wanguo, said upbeat expectations bolstered the stock market during the first six months of 2009. But it's unclear whether those expectations can be maintained through the second half of the year.

A fundamental question surrounds the future of China's Main Street economy. For now, as consumer prices fall and exports stagnate, many companies have yet to see bottom line improvements. Economic uncertainties will have a negative impact on the stock market.

Gui argues that if expectations are not matched by real profits, the Shanghai stock index cannot expect investor support to continue. But policymakers are never far behind.

Full article: http://english.caijing.com.cn/2009-07-31/110219135.html

Sichuan Expressway Transfers 50 Mln State Shares to SSF

07-31 17:04 Caijing By staff reporter Song Yanhua

Sichuan Expressway is the first listed company to comply with a new policy that took effect June 19, under which all state-owned companies that listed after China's reforms of state shareholdings in 2005 must transfer shares worth 10 percent of their IPO to the state pension fund.

The two biggest shareholders of Sichuan Expressway Co. (SHA:601107, HK:0107) have transferred 50 million state-owned shares in the freeway operator worth about 467 million yuan to the National Council for Social Security Fund in accordance with regulatory requirements.

Sichuan Expressway Construction and Development Corp. and Huajian Transportation Economic Development Co. handed over a combined 1.64 percent stake in the expressway operator, or 10 percent of its initial public offering, the NCSSF said in a statement on its Web site on July 30.

The social security fund became the Sichuan-based expressway operator's fourth-largest shareholder following the transfer, the statement said.

Sichuan Expressway is the first listed company to comply with a new policy that took effect June 19, under which all state-owned companies that listed after China's reforms of state shareholdings in 2005 and companies that will list in future must transfer shares worth 10 percent of their IPO to the state pension fund.

The new measures aim to strengthen China's social security system.

According to NCSSF figures, 131 listed companies are due to transfer 8.394 billion state-owned shares, with a market value of about 64 billion yuan.

Sichuan Expressway closed up 5.78 percent at 9.34 yuan on July 30. Its H shares fell 3.61 percent to HK$3.20.

yuan = 14 US cents

Full article: http://english.caijing.com.cn/2009-07-31/110219207.html

Taiwan model-actress Kelly Lin

CCTV

Taiwan model-actress Kelly Lin was voted "Asia's Sexiest Woman" by Malaysia's FHM magazine in 2002. Such a label might conjure images of an imposing, sultry and exotic Oriental beauty. But Kelly Lin is nothing like that. The affable actress is the poised epitome of cool confidence. She recently abandoned her sexy image to play the role of a rather foolish office secretary who utterly lacks fashion sense.

Kelly Lin starred alongside Mainland comedy king Ge You in a dark comedy film called "Gasp", which also stars Hollywood actor John Savage. Lin plays an office lady who is mad about the latest fashion trends. Yet, her look often misses the mark which generates many hilarious antics. The comic role is a departure from previous roles which often showed off her beauty, or depicted her as a woman of any man's dreams.

Lin was born in Taiwan in 1973. She moved to California in the US with her family at the age of 12. After graduating from the university, she decided to pursue a career in show business in Taiwan.

Lin initially wanted to be a singer and has already recorded demo tapes for a record company, but she was given numerous offers for modeling in television and print ads.

In 1999, Hong Kong director Wong Jing invited her to develop her cinematic career in Hong Kong. She then starred in "The Tricky Master" and "For Bad Boys Only". With her success as an actress, she decided to abandon her hopes of becoming a singer.

The turning point in Lin's career came in 2001 for her role as a quick-witted and capable white-collar worker in "Running Out of Time 2".

The year also saw her team up with Hong Kong veteran actor Andy Lau in "Full Time Killer". She also worked with film director Tsui Hark in "The Legend of Zu".

After a two-year of hiatus from the film industry, Lin returned to acting with films such as "Tokyo Trial" in which she plays a Japanese journalist.

In 2007, she starred in "Sparrow" directed by Johnnie To. The film was nominated for the "Golden Bear" at the Berlin International Film Festival in 2008. She also co-starred in the three-part-segment film "Triangle" and "Mad Detective" which was a runner-up and a "surprise film" at the 64th Venice International Film Festival.

Lin seems to have chosen her movie projects wisely, involving herself in art films, and giving her opportunities to travel around the world to various film festivals. Because of this, her reputation has having "Electrifying Eyes" has been forgotten and replaced with the "Film Festival Queen" of Chinese entertainment.

View video: http://www.cctv.com/program/cultureexpress/20090727/104404.shtml

Full article: http://english.cctv.com/20090727/101677.shtml

Abortion Statistics Cause for Concern

Xinhua News Agency July 30, 2009

Inadequate knowledge about contraception is a major factor in the 13 million abortions performed in China every year, research shows.

This is an unfortunate - and avoidable - situation, experts said, and improvements need to be made.

Li Ying, a professor at Peking University, said Wednesday that young people need more knowledge about sex.

A survey done by 411 Hospital of PLA (People's Liberation Army) in Shanghai, for example, found that less than 30 percent of callers to a hotline knew how to avoid pregnancy, and only 17 percent were aware of venereal diseases.

More than 70 percent said they did not know sexual transmission is the major contributor to the spread of HIV/AIDS.

Li said Chinese parents are reluctant to teach their children about sex, so more needs to be done on sex education.

"Sex education needs to be strengthened, with universities and our society giving more guidance," she said.

Wu Shangchun, a division director of the National Population and Family Planning Commission's technology research center, told China Daily that research shows nearly half of the women who had abortions had not used any form of contraception.

"The challenge of reducing (the number) of women seeking abortions in China is tough," Wu said.

Yu Dongyan, a hospital gynecologist, said new mores have changed the social setting.

"Sex is no longer considered taboo among young people today, and they believe they can learn everything they need from the Internet. But it doesn't mean they've developed a proper understanding or attitude toward it," Yu said.

Government statistics show that about 62 percent of the women who have abortions are between 20 and 29 years old, and most are single.

Wu said the real number of abortions is much higher than reported, because the figures are collected only from registered medical institutions.

Many abortions, Wu said, are performed in unregistered clinics.

Also, about 10 million abortion-inducing pills, used in hospitals for early-stage abortions, are sold every year in the country, she said.

The Shanghai hotline, which offers help for pregnant women, has reported an increase in calls, mostly from women 18 and under.

Figures from 411 Hospital show that as many as 30 calls were received on its hotline some days this month, compared with about 10 per day in pervious months.

Most callers had questions about what to do after becoming pregnant or how to get an abortion, said Yu.

Wu said birth control information mainly reaches young married couples.

The morning-after pill, which can be used within 120 hours of intercourse to prevent pregnancy, has been widely sold as emergency contraception since 1998, she said.

Wu said the pills have sold well, but she added that incorrect use is a problem.

Wu also said much information on the Internet about sex frequently is incorrect.

Sun Xiaohong, of the educational center of Shanghai's Population and Family Planning Commission, said she found it difficult to promote sex education in schools because some teachers and parents believe it will encourage sex.

Sun Aijun, a leading gynecologist at Beijing Union Hospital, said there also is a misconception among some women that the contraceptive pill is unsafe.

Sun said many unmarried couples choose to use condoms, but that this can be problematic because some women find it difficult to turn down requests from a partner not to use them.

Abortions cost about 600 yuan ($88). Since the 1990s, doctors have not asked for a woman's marital status when an abortion is performed.

There are about 20 million births in the country each year, Wu said.

Full article: http://en.chinagate.cn/top_news/2009-07/30/content_18231393.htm

China to Have 1,027 Rural Banks by 2011

Shanghai Daily July 30, 2009

China plans to increase the number of rural banks over tenfold to 1,027 by 2011 to bolster financial support to less developed areas, the country's top banking regulator said on Wednesday.

The increase will concentrate on counties in central and western China that rely heavily on agriculture and also areas with low financial coverage, the China Banking Regulatory Commission said on its website.

"We are going to introduce more rural financial players into the market to improve competitiveness and add financial coverage in the areas," the banking regulator said.

The country had 100 rural banks at the end of last month, it said.

China began trials for new types of financial institutions in rural areas, such as rural banks and rural lending companies, in 2006.

The new financial services reported a combined profit of 40.74 million yuan (US$5.96 million) so far this year.

The central government is encouraging banks and companies to do financial business in rural areas. Qualified non-financial companies are allowed to set up rural cooperatives to boost the financial industry.

The country is taking a number of measures to support rural economic and social development to achieve a balanced growth between the countryside and urban areas.

China gives subsidies to rural banking nationwide and the Ministry of Finance offers qualified rural financial institutions subsidies equal to 2 percent of their loan books.

The payouts go to rural banks, rural lending companies and rural credit cooperatives that have expanded their overall loans in the previous year and whose loan-deposit ratio was at least 50 percent.

Rural cooperatives also enjoy a lower reserve ratio of 11 percent, which frees more capital for lending.

Future tax cuts for rural banking are also in the pipeline, the regulator said yesterday.

Overseas banks such as HSBC and Standard Chartered Bank have opened rural banks in China while Citi has opened lending companies.

Full article: http://en.chinagate.cn/top_news/2009-07/30/content_18232427.htm

Bailian brings taste of Europe

Shanghai Daily 2009-7-30

Shanghai Bailian Group Co Ltd, the nation's largest retail conglomerate, said yesterday it was increasing its cooperation with overseas retailers and food producers as it becomes a dynamic player on international markets.

The company held a trade fair with European suppliers in Shanghai yesterday, allowing more than 3,000 kinds of food products made by 127 EU companies to enter the Chinese market through Bailian's distribution channels. These included chocolate, snacks, wines and beverages from countries such as Belgium, France and Italy and will be sold in Bailian's major supermarkets, including Hualian, Lianhua and Hualian GMS, and convenience stores such as Lawson and Quick.

Bailian, formed from the merger of four state-owned enterprises in 2003, is China's largest retailer with 7,400 stores nationwide.

Bailian said the trade promotion was part of its ongoing global strategy, which not only includes the introduction of high-quality imported food but also involves the promotion of more made-in-China products on overseas markets.

Yesterday's food imports came after a sourcing agreement signed between Bailian and food producers in EU countries in June this year.

Trade relationships with enterprises in the United States and Japan were set up in July last year and they have already brought in various branded bags, presents and food into China.

Bailian said the demand for imported food had risen quickly over the past few years following lowered tariffs and consumers' stronger purchasing power driven by the nation's fast-expanding economy.

The company also plans to organize domestic suppliers to hold similar trade promotions in Europe and help them expand overseas markets.Lianhua Supermarket, a subsidy of Bailian, has teamed up with French's Carrefour SA to produce and export food under its own name.

Lianhua also produces frozen vegetables and has already sold around 200,000 packages of mungbean noodles in stores belonging to Japan's Izumiya Co.

Full article: http://www.chinaretail.org/shownews.asp?id=971

China steps up fight against online porn

Xinhua 2009-07-30 20:33

Beijing: China's ongoing war against Internet pornography and prostitution is to be ramped up, said the Ministry of Public Security Thursday.

The crackdown between August and October will be conducted by nine government and Communist Party departments, involving police, publicity, health, information technology, banking, and radio, film and television.

They will target porn websites which set up servers abroad and do business inside China, websites which organize pornographic performances and prostitution, as well as fake porn websites which cheat prospective subscribers.

The move will also crack down on websites which spread porn through WAP services to cell phones, organizations and individuals who advertise on porn sites, and organizations which provide online payment services to these websites.

Others on the hit list are service providers who provide overseas servers for domestic porn websites, adult product retail websites and social video websites which set up links to porn websites.

Further, the crackdown will also target search engines that do not filter pornography, mobile phone service providers and third-party e-commerce payment providers that provide illegal services, advertising companies using porn websites, domain name registration organizations which do not record correct information and telecom firms that do not keep log files.

"During the move, we will not only aim to target serious online porn crimes but also cut the chain that implicates service providers, advertising firms and third-party payment providers," the ministry said.

Full article: http://www.chinadaily.com.cn/china/2009-07/30/content_8494735.htm

Chinese first as Zhang crushes 800m free record

CCTV 2009-07-30 08:53 BJT

Zhang Lin made the first World Championships swimming gold for a Chinese man one to remember here on Wednesday, demolishing Aussie great Grant Hackett's world record in winning the 800m freestyle.

Zhang sliced six-and-a-half seconds off the previous world record of 7:38.65, set by Hackett at the 2005 World Championships in Montreal. That was the first time the event was swum by men in world competition.

Full article: http://english.cctv.com/20090730/101388.shtml

Wanted list released in Urumqi Riots

CCTV 2009-07-30 12:40 BJT

Police in Urumqi, in northwest China's Xinjiang Uygur Autonomous Region, have released the names and photos of wanted suspects in the July 5th riots.

They advise suspects to turn themselves in or report to 110, the police line. Officers have also made public the first batch of 40 detained suspects. Police tracked down 25. Local residents turned in the others.

Full article: http://www.cctv.com/program/newshour/20090730/106439.shtml

Property Developers Emerge from Doldrums

07-30 14:43 Caijing By staff reporter Ci Bing

A dry spell for capital access turned most Chinese real estate developers skittish in early 2009.

But by June, developer boldness was back. That was clear on June 30 when Franshion Properties (HKSE: 00817) agreed to pay 4.06 billion yuan for a 15-hectare plot in eastern Beijing for a residential-commercial complex.

A credit easing has emboldened Franshion and other developers. According to the National Statistics Bureau (NBS), real estate development loans around the country rose 32.6 percent in the first six months this year compared with the same period 2008 to 538.1 billion yuan. Retail mortgage loans totaled 282.9 billion yuan, up 63 percent year-on-year.

And as capital flowed more freely, real estate sales volume and prices have risen. For example, average prices for residential housing in Guangzhou recently reached highs not seen since 2007. Buyers in June were paying 9,676 yuan (US$ 1,444) per square meter for new housing, and 8,000 yuan (US$1,194) per square meter for previously owned units.

Better access to capital has encouraged home buyers as well as property investors such as Franshion, owned by state-owned industrial conglomerate Sinochem, reflecting banker reaction to the central government's loose monetary policy.

The policy paved the way for banks to issue 7.37 trillion yuan in new loans in the first half 2009, up 4.92 trillion yuan from the same period last year. Most of the new credit was issued to state-owned enterprises, including developers such as Franshion.

Nevertheless, government regulators have been paying close attention to the warming real estate sector. The China Banking Regulatory Commission (CBRC), for example, recently released two policy statements about second-home mortgages, showing concerns about risk.

Second-Home Loans

CBRC's notices, the first of which appeared in April, repeated previously issued policies about mortgages for second-home. Then a CBRC notice June 2 called for "strengthening" mortgage loan risk management, and said commercial banks would be required to conduct strict credit reviews as part of their mortgage-writing procedures.

Central government regulators decided to tighten lending policies for second homes to send specific signals to the market, said Li Wenjie, northern regional general manager of Zhongyuan Real Estate. For example, policymakers were concerned that some local governments apply to second mortgages the same favorable policies they use to promote initial housing purchases.

For many commercial banks, however, property developer loans are safer and more profitable than manufacturing company loans. An official with ICBC's finance department told Caijing that issuing credit to developers can help banks encourage all kinds of related business, in areas ranging from wealth management to credit cards.

Liquid Developers

So far this year, developers China Greentown (HKSE: 03900), SOHO China, Shimao Property (HKSE: 00813), Capital Land, and Shui On Group have each obtained more than 10 billion yuan in bank loans. Meanwhile, regulators with the China Securities Regulatory Commission (CSRC) have approved cash-raising stock offerings proposed by Poly Real Estate (SHSE: 600048), Capital Development (SHSE: 600376) and Gold Land (SHSE: 600383).

This flurry of activity followed a recent State Council notice calling for healthy development of the real estate market. The property sector is not on the central government's list of 10 targets for industrial adjustment under the economic stimulus program launched last fall. But the State Council's interest has prompted local governments and financial institutions to write relevant guidelines into their programs designed to promote the market.

For example, the Beijing municipal government is encouraging commercial banks to provide credit for the construction of low-income residential housing. The policy also allows developers to postpone land lease payments to the local government. And some financial institutions have offered loan payment extensions to property developers.

State-owned Enterprise Support

In recent months, state-owned real estate companies have been the major land buyers in China's biggest cities including Beijing, Shanghai, Guangzhou and Shenzhen.

Among the most active at land auctions were Poly Real Estate and CR Land (HKSE: 01109), each of which is connected to the state. State-owned MCC, China Railway and China Electronics Technology Group Corp. joined auctions as well.

Franshion emerged as a new property king almost overnight. The developer, listed on the Hong Kong exchange since August 2007, owns several well-known properties including Shanghai's Jin Mao Tower and the Beijing World Trade Center.

Franshion's annual report said the company had HK$ 5 billion in cash at the end of 2008. Early this year, it raised HK$ 2.7 billion through an equity allotment, and obtained 24.5 billion yuan in bank credit. Sinochem owns a 69 percent stake in Franshion.

Challenges Ahead

But better cash flow and the strengthening of state-owned real estate companies tell only part of the story. China's real estate sector this year is also facing challenges. One is overcapacity.

For example, China's export manufacturers are grappling with excess production space, which means state-owned enterprises are not likely to build more factories, said Pan Shiyi, chairman of SOHO China. But they still have large pools of capital, which some choose to invest in real estate and through land purchases.

Yet the pace of land buying has slowed in the past year. NBS data indicates that, during the first six months this year, real estate developers bought 136 million square meters of land, down 26.5 percent year-on-year. NBS also tallied a total 479 million square meters of new construction for the period, down 10.4 percent year-on-year.

Wang Cheng, a consultant with real estate adviser DTZ Rockwood, said the declines in land purchases and new construction reflect market expectations for the real estate sector. If supplies continue to fall, though, property prices will rise.

1 yuan = 14 U.S. cents

Full article: http://english.caijing.com.cn/2009-07-30/110218571.html

New Face Model competition held in N China

Winners of the New Face model competition Guo Jie (L) and Kou Yujie attend the awarding ceremony in Taiyuan, capital of north China's Shanxi Province, July 28, 2009. The New Face model competition concluded on Tuesday

See pictures: http://www.china.org.cn/culture/2009-07/30/content_18234488.htm

China's Suning Becomes Direct Supply Channel For HP

China Tech News July 30, 2009

Chinese electronics retailer Suning has signed a direct supply agreement with HP, making it the only direct supply channel provider for HP in China.

With the agreement, the two parties are expected to achieve annual sales of CNY1.5 billion in 2009 and total sales of over CNY5 billion in the next three years.

Sun Weimin, president of Suning, told local media that the establishment of a direct supply model with manufacturers will be a focus in the future development of home appliances channel providers.

According to HP, the direct supply model will shorten the supply chain, so as to lower the prices of products. In Europe and the United States, HP already adopted the direct supply model long ago and supplies its products to major retailers directly. With the gradual maturities of the

Chinese consumer market and channels, the company hopes to launch this direct supply cooperation in this marketplace to optimize its supply chain.

Prior to the signing of this agreement with Suning, HP distributed products through its nationwide general agents in China.

So far, several other technology companies, including Lenovo, Dell, Hasee, and Tongfang, have also reached direct supply cooperation with Suning.

Full article: http://www.chinatechnews.com/2009/07/30/10236-chinas-suning-becomes-direct-supply-channel-for-hp/

Chinese Automobile Firms May Test IPO Waters

China Daily Web Editor: Cao Jie

Chinese automobile firms are making a beeline to the capital market to raise capital for their expansion plans and to cash in on the vehicle boom in the domestic market.

Industry analysts, however, maintain that the automakers market fate would depend largely on their own profitability.

Battery and automobile maker BYD Co said recently that it is planning to raise capital for new projects through issuance of as many as 100 million A shares on the Shenzhen Stock Exchange.

The country's largest private automaker Chery Automobile Co said last week that it was restarting plans for an A-share IPO as "the current global industry slowdown due to the financial crisis provides Chery with the best opportunity to boost expansion plans by raising capital".

The company refused to disclose where and how much it hoped to raise through the IPO, but said Chery was "qualified" to list due to its strong financials.

Other automobile firms like Great Wall Motor Co, Guangzhou Automobile Group Corp, Lifan Industry (Group) Co Ltd and Brilliance Group are also mulling domestic IPOs.

China lifted the ban on new share listings last month after suspending it for almost a year. The Shanghai Composite Index has jumped nearly 80 percent from 2008, a clear signal of a rebound in the domestic stock market.

Surprisingly there is no automaker among the 34 firms already approved to be listed.
"For automobile manufacturers, IPOs are the best route to raise capital due to the low costs involved," said Ouyang Shan, analyst, Orient Securities.

He said that the government push for industry restructuring through a series of merger and acquisitions has forced automobile firms to shore up capital.

"Profitability is the key for a successful IPO. However, due to the economic slowdown, not too many automakers are capable for IPOs."

Ouyang expressed the view that Guangzhou Auto and Chery could be the first firms to test the market waters due to their robust financial capabilities.

China has surpassed the US as the world's biggest vehicle market for six consecutive months this year as the government's stimulus measures have started yielding positive results.

However, domestic automakers reported steep falls in their earnings despite brisk vehicles sales.
According to statistics collected by Shenyin & Wanguo Securities, in the first quarter, net profit of listed automakers in China fell nearly 60.72 percent year-on-year.

Fortunately, the hot sales in the following months helped the firms to recover some lost ground.

Full article: http://english.cri.cn/6826/2009/07/30/1721s505318.htm

Hi-tech products may flow in

By Bao Daozu (China Daily)

The US has agreed to loosen restrictions on the export of hi-tech goods to China and speed up its recognition of the nation's market economy, Vice-Premier Wang Qishan said on Tuesday after the China-US Strategic and Economic Dialogue (SAED).

"The US pledged to facilitate exports of high-technology products from the US to China," he said, while calling the SAED a "full success".

Sino-US trade has grown massively since China "opened up" 30 years ago. Last year - in spite of a seven-year low in China's rate of growth because of the global financial crisis - the volume of trade between the countries amounted to $333.7 billion. The number was $2.5 billion 30 years ago.

However, despite the massive volume of trade, the US suffers from a significant trade deficit with China and has blamed China's "undervalued" yuan for the fact that more goods flow from China into the US than in the other direction.

Analysts have said the reluctance of the US to export hi-tech products is partly to blame and noted that unrestricted sales of hi-tech goods would help balance bilateral trade.

Wang said China and the US agreed to "accelerate" the implementation of the Guidelines for China-US High Technology and Strategic Trade Development and formulate the Action Plan on Expansion of China-US High Technology and Strategic Trade Cooperation in Priority Sectors, which analysts say will encourage the export to China of hi-tech goods.

The US also recognized the "continued progress" China has made in its pursuit of market reforms and will "earnestly" consider its concerns, and work toward its market economy status being acknowledged in an "expeditious" way, US officials said.

Deputy Minister of Commerce Ma Xiuhong said both sides were conscious of the solid progress China had made in transitioning from a planned economy to a market-oriented one in the past 30 years.

"We still have some hurdles (to clear) we need (more) in-depth discussions," she said.

Calling the US position "positive", Ma said she hoped the issue would be resolved "within a short time".

Wang, who co-chaired the Economic Track of the talks with US Secretary of Treasury Timothy Geithner, said the nations agreed to oppose protectionism and increase the representation of developing countries in the decision-making of major international financial institutions.

China and the US will also hold regular exchanges, to talk about how they are dealing with financial issues and working for a global recovery.

At the SAED talks, China and the US reached consensus, or minimized the differences between them, on issues including economic rebalancing, climate change and regional security, laying the foundation for future cooperation.

The nations signed a Memorandum of Understanding on climate change and energy cooperation and issued a joint statement, mapping out their achievements.

The dialogue has "lent fresh impetus to the development of a positive, cooperative and comprehensive China-US relationship", Wang said.

Analysts praised the talks.

"The relationship with China is one of the most important global relationships for the US now and in the years ahead," said US-China Business Council President John Frisbie. "It is hard to imagine either country succeeding economically or on key issues, such as climate change, without constructive and cooperative ties."

Steve Orlins, president of the National Committee on US-China Relations, said: "I applaud President Obama and President Hu's decision to continue and expand dialogues into the Strategic and Economic Dialogue."

Full article: http://www.chinadaily.com.cn/bizchina/2009-07/30/content_8490580.htm

Liquidity crunch, loan limits stop market rally

By Zhou Yan (China Daily)

Chinese stocks plunged 5 percent yesterday, the biggest one-day drop in eight months, on the back of capital diversion from the mega debut of China State Construction Engineering Corp (China Construction) in Shanghai and concerns over bank lending restrictions.

The benchmark Shanghai Composite Index sank 171.94 points to 3,266.43 points. It dropped as much as 7.7 percent in the afternoon session. The smaller Shenzhen Component Index lost 5.54 percent to 13,070.6 points.

Investors' selling spree pushed the combined turnover on the two bourses to a historical new high of 437.3 billion yuan.

"The persistent rally over the last five months made the market value irrational, so a correction was necessary," said Zhong Hua, a strategic analyst with Changjiang Securities.

Shares of China Construction, the country's largest home builder, added 56.22 percent on the first trading day yesterday to close at 6.53 yuan, below the opening price of 6.70 yuan, with about 70 percent shares changing hands.

The builder of the Olympic aquatics center "Water Cube" raised 50.2 billion yuan in new capital in its stock offering last week at 4.18 yuan apiece, making it the biggest IPO in the world since March 2008.

"China Construction's debut has diverted a large sum of capital from the market and caused a temporary shortage of liquidity, which was never a problem in the market before," said Mao Rui, an investment manager at Guojin Asset Management Center.

Investors' penchant for newly-listed stocks was also cooled down by the bad performance of Sichuan Expressway in the last two days after a remarkable surge of over 300 percent at its Shanghai debut on Monday, Mao added.

A-shares of the toll-road operator dropped straight to its daily caps of 10 percent in the following two days.

The China Securities Regulatory Commission lifted a nine-month ban on new listings in June after seeing the turnaround of the stock market, which doubled from last year's low in November to become the world's best performer early this week.

"Unlike smaller caps such as Sichuan Expressway that were mainly propped up by hot money and individual investors, heavyweights like China Construction are mostly influenced by more rational fund managers," said Mao, adding that institutional investors' judgment was largely based on valuation, which prevented China Construction from surging out of reasonable levels.

Nonetheless, China Construction's closing price of 6.53 yuan, which equals to 43 times its price/earnings (P/E) ratio, was still over-valued, in comparison with the average valuation in the real estate and construction sectors, according to Qiu Bo, an analyst at Guosen Securities.

According to financial information provider Wind Info, the average P/E ratio in the construction sector was 27.9 times.

"The rational price range of the company should be around 4.8 yuan to 6.2 yuan," said Qiu, projecting the construction giant's earnings per share in 2009 to reach 0.17 yuan.

In yesterday's trading, losing stocks outnumbered advancing ones by 1607 to 98, mainly pulled down by shares in the construction and property sectors with only 5 out of 105 trading stocks gaining.

Vanke Real Estate Co, the country's largest property developer, shed 7.3 percent to 13.2 yuan, while rival Poly Real Estate Group Co dropped 8.6 percent.

"The still ample liquidity will limit the market decline going forward, but the growth range will largely depend on the property transactions and the second-quarter earnings results from the realty developers under uncertain property policies," Changjiang Securities' Zhong said.

Full article: http://www.chinadaily.com.cn/bizchina/2009-07/30/content_8490643.htm

Shipbuilders facing choppy seas

By Ding Qingfen (China Daily)

For Chinese shipbuilders, this is probably the worst of times -- and the hardest period has yet to come. Major ship owners, both domestic and foreign, are expected to go slow on new orders during the next one-and-a-half year as they wait for the global economy to recover.

Industry insiders and analysts said the Chinese shipbuilding industry, the largest worldwide, would face its real test a few months from now, when a slew of small- and medium-scale ship builders start to stop production or close down factories, and large builders lay off workers and cut salaries.

Ship owners usually order vessels three years before they are put to use. So, the financial crisis, which erupted late last year, actually exerted less of a negative impact on the shipbuilding industry. In fact, the shipping sector was hit more by the slide in foreign trade.

Despite a big contraction in new orders and cancellation of earlier orders by international ship owners, Chinese shipbuilders have been working on old orders, and the medium and small players have been limping along due to financial support from the local government.

But, as the prospects for the global economy are still looking bleak, shippers are reluctant to book new orders; and shipbuilders are starting to get more and more anxious.

"We haven't signed any new deals since late last year, but this is not the worst part. It's hard to predict when the industry would show any positive sign of recovery," said Hu Keyi, a senior executive and chief engineer at Shanghai Jiangnan Shipyard, one of the nation's largest shipbuilders.

Existing orders could help Jiangnan Shipyard limp through to the first half of 2011, but there will be trouble if "we still cannot get any new deals by end of this year", he said.

Hu, and his industry counterparts, have been running around seeking new deals.

Even though the Chinese economy is poised on the cusp of a recovery, global trade is in the doldrums, and is expected to fall by 10 percent this year, according to the WTO.

"The most optimistic thing about the shipping industry now is that it cannot get worse (than this)," said Sun Liping, a shipping analyst from Guotai Jun'an Securities.

There is no reason why "shippers or ship owners will massively book orders till the end of 2010" and "they will probably continue to cancel deals as they did in the first half of this year", Sun said.

Shanghai Waigaoqiao Shipbuilding, a leading industry player, has not fared any better. "Nobody can understand how we feel at this time; we don't see any glimmer of hope looking into the near future, say, one or two years," said Tao Ying, chief engineer from Waigaoqiao Shipbuilding.

Waigaoqiao has not received any new orders since September 2008, and if the trend continues until early next year, the company would probably start firing workers and chopping salaries, said Tao.

This year, China overtook South Korea as the largest shipbuilder, but now the nation is staring at overcapacity as a slew of investors aggressively entered the sector during the past few years to cash in on the rapidly growing global trade.

A spokesperson from the Ministry of Industry and Information Technology said the overcapacity in the shipbuilding industry was acute. Ships that transport commodities, around one-fourths of the capacity, are being left unused, he said.

Statistics from Clarkson, the world's largest shipping research institute, showed that new orders into China from January to June were 1.9 million tons, 600,000 tons higher than South Korea's. However, from September 2008 to June this year, new orders only accounted for between 1 and 2 percent of orders during the same period the previous year, it estimated.

Compared with leading industry players, hundreds of smaller shipbuilders are likely to face a bigger blow. "Many private and small-scale companies would have closed down by late 2008 if the provincial governments had not offered them a hand in order to buoy their local economies," said Tao.

But the help cannot last for long, as "they are doomed to die when there are no new orders," he said.

Bigger shipbuilders like Jiangnan and Waigaoqiao are now focusing on improving quality to avoid order cancellations and trying to win over niche markets that are less immune to an economic slowdown.

Jiangnan Shipyard has shifted its focus to value-added ships and ships for special use such as offshore engineering carriers.

This year, a batch of companies turned to building carriers for special use, including liquefied gas carriers and offshore engineering carriers, said industry insiders.

Full article: http://www.chinadaily.com.cn/bizchina/2009-07/30/content_8490651.htm