Work on drafting an anti_monopoly law for China started in the 1980s. In thecourse of conducting research in competitive economies such as the UnitedStates and Germany, and evaluating different versions of antimonopolylegislation, Chinese officials and experts have come up with several drafts.Lawmakers' attitudes have advanced to such an extent that they have evenconsidered establishing a State fair trade commission, similar to the USFederal Trade Commission, as an arbitrator to help ensure implementation ofthe law. Economists involved are also beginning to consider a system inwhich the government would be able to file suits against actions thatthreaten competition, block market entry and abuse market power.

The law will be the major part of the answer to administrative monopoly. Dueto fears that it would hamper the growth of the 1,000 enterprise groups thecentral government has selected as the key engines of economic development,the draft has been shelved and the process towards legislation has come to ahalt. As a result, State_monopolized sectors are continuing to setexorbitant prices for consumers and the vested interest groups arebuttressing their market positions. For example, local bureaux of themonopolist power utility sometimes force farm users to pay up to double thestandard charges set by the government, and customers constantly complain ofthe exorbitant charges imposed by the telephone service sector, which isdominated by a single giant firm.

Collusion by competitive enterprises in setting price floors or priceceilings, a cartel action that is the number_one target of antitrustlegislation, is gaining momentum. Since major enterprises in the productionof farm trucks set a price floor by mutual agreement, suppliers ofcomponents for the truck plants have also come together to adopt pricecontrols. Manufacturers and industrial associations in other sectors arefollowing suit and planning similar actions to safeguard their interests.Economists are appealing to the authorities to end the uncertainty over thedraft antitrust law, which they say is essential to set game rules forcompetition in the marketplace and break up the State monopolies that havedominated key sectors for half a century.
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The State Economic and Trade Commission (SETC) is to regulate trade pricesto stop a vicious discount war among enterprises in the same sector. Thecommission has just issued a Circular on Adopting Regulatory Trade Prices onSome Industrial Products. The circular lays down the principles of the newpolicy, the responsibilities of each trade association or managerialdepartment, and the products the new price regulation applies to. Thecircular states that the range of application of the new policy should bedecided through discussions between State bureaux under the SETC and tradeassociations.

Some 21 sectors are covered by the circular. The policy has already beenimplemented in the plate glass, agricultural vehicles and soda ash sectors,while another five industries are drafting plans to apply it. In the pastfew years, redundant construction in China has caused serious oversupply insome trades. Many companies have taken to discounting their products toensure their survival, leading to cut_throat competition. Thirteenenterprises such as Sichuan Changhong Electronics Group and Chunlan Grouprecently issued a joint appeal to other Chinese producers to refrain fromgiving unreasonable discounts on their products.
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Zhejiang Province on the eastern Chinese coast has been redoubling itsefforts since the beginning of this year to improve its overseas investmentenvironment. The province has instituted 20 new measures to encourage moreoverseas investment, including the upgrading of the region'sinfrastructure. According to these measures, the better developedprefectures and prefectural_level cities, and counties and county_levelcities, are all expected to set up specialized organizations to provideoverseas investors with free services. The measures urge prefectures, citiesand counties to simplify procedures for approving overseas_financedprojects, while local governments are not permitted to install new programsfor collecting fees from overseas investors. Fee_collecting programs alreadyin place are expected to be abolished.

The province has also published 10 articles of preferential policies toencourage direct foreign investment in productive projects, infrastructure,high_tech industries, and economic development zones above the provinciallevel. Zhejiang has also intensified its overseas investment promotionactivities by sending trade missions to European countries and it hasparticipated in a trade fair held in Hong Kong in early June. The provinceplans to complete the compilation of an investment project database laterthis year. From January to May, Zhejiang Province approved 379overseas_financed projects involving the contractual use of $638 million ofoverseas investment.
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Starting from August 1 this year that lands to be used by newly approvedreal estate projects within the planned areas of Guangdong Province(county_level cities are also included) should be acquired through publicbidding and auction. Guangdong is the first province in the country toeffect such a system for a fair competition. Lands used for real estateprojects refers to lands developed for the construction of commodityresidential buildings, office towers, commercial stores, hotels, andluxurious entertainment facilities except those used to build industrialworkshops and shelters allocated as a kind of welfare. The Procedures forAdministering the Public Bidding and Auction of the Urban State_owned Landsof Guangdong Province, which is to be promulgated, prohibits governments atvarious levels from approving land used for private purposes.

Guangdong is among those provinces that first promoted the public biddingand auction of the State_owned lands in the country. So far more than 20cities and counties have made pilot trials on such a method in GuangdongProvince. However, lands acquired by means of public bidding and auctiononly accounted for 5% of the total lands let due to different reasons.Great areas of lands are still being let for profit_making purposes byagreement and contracting. Random approval to the uses of lands has not onlyled to a severe waste of land, but also served as a major reason ofillegally letting out or speculation of land. Governmental involvement wasfound out in 60% of the ten thousand illegal cases of land leasinginvestigated by the Guangdong provincial government.

To allocate the land through the effect of the market is very important inreform of land use. The Guangdong provincial government requested its citiesand counties to formulate their own plans for public bidding and auction oflands on the basis of their social economic development plans, industrialpolicies, urban construction, and the planned annual uses of lands. Theseplans should be reinforced after getting approval by the provincialgovernment. Moreover, the provincial government has also stipulated thatthe public bidding and auction of the right of using State_owned landsshould be organized and executed uniformly by the competent departments incharge of land administration at county_level or above.

To encourage developers' active participation in the market regulation, theprovincial government has also specified that those investors, whose landshave been obtained by means of public bidding and auction, could directlyapply for construction of infrastructure of their projects and the licenseof running real estate development from related governmental departmentswithout going through the time and energy consuming formalities. All thecompetent provincial departments are required to say okay to theseapplications.
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The Ministry of Agriculture is drafting a set of quality standards as a keymeasure to stimulate the domestic flower industry and gain a larger share inthe international market. Related officials said that the standards wouldpromote the overall quality of flowers and ensure a fairer trade order.China's flower production has boomed during the last decade along with theimprovement in people's living standards. Flower shops have mushroomed,enjoying increasingly brisk business, while street vendors with buckets offlowers have become a common sight at rush hours.

However, problems have cropped up endangering the development of thefledging industry. Production is increasing, but quality is failing toimprove accordingly; a very low price is enforced on growers no matter whatthe quality of their flowers while traders take the bulk of the profit. In asense, the standards will also protect flower growers' interests so thatthey can increase their production and enhance its quality. So far, fivequality standards for cut roses, gypsophila, gladioli, carnations andchrysanthemums__have been issued. More than 30 such standards are expectedto be issued by the year 2000. Meanwhile, the ministry is strengtheningstatistical and information work, as part of efforts to promote thesector's development.

In the past, too much attention was paid to the production process. Atpresent, the administrative department is shifting the emphasis to each endof the process__quality species as the beginning and marketing at thefinish. Both are bottlenecks for the development of the Chinese flowerindustry. Better plants need to be grown and the market needs order. Thecountry's high_quality flowers and 70_80% of flower seedlings areimported. It is hoped that, with the industry's development, Chineseresidents will be able to have easier and cheaper access to home_grown andtraditional flowers such as the peony. The ministry will set up a nationalstatistics system for the sector next year. It is expected to supply boththe growers and the market with an up to date flower information network online. So far the network has more than 40 big member units, fromadministrative departments to flower markets and flower growers.
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China is confident of reaching its economic goal of 8% growth in grossdomestic product (GDP) for 1998 as a whole through its efforts in the latterhalf of the year, Premier Zhu made the remarks on August 26 while meeting aforeign visiting delegation. The nation has achieved a quite favorablebalance of trade in recent years, and with its investment environment muchimproved, direct foreign investment of $30 to $40 billion flows into Chinaevery year. China's international income and outgoings are basically inbalance and the country has a sound financial market with sufficient foreigncurrency reserves.

Zhu reiterated that the Chinese currency will not be devalued. The fact thatChina has not devalued its currency in the face of the Asian financialcrisis has contributed greatly to Asia, and to the world as a whole, and thecrisis will have little influence on China's economic development andreform process. China's reform goal is to establish a socialist marketeconomy, which differs from that of other countries. The difference betweenChina's socialist market economy and the capitalist market economy in theUnited States is that China insists on the joint development of multi_formedownership while retaining public ownership as the mainstay.

Zhu pointed out that the publicly owned enterprises should not be consideredworse than the privately owned ones. In fact, publicly owned enterprises canbe managed very well. The makeup of public ownership can actually bediversified, and not limited only to the form of State ownership, and adiversified public ownership and the joint development of multi_formedeconomic entities has in fact taken shape in China. The ownership now hasthree forms: State_owned, accounting for approximately 35%; collectivelyowned firms, or firms under the cooperative system, which is also a form ofpublic ownership, accounting for another 35%; and the final 30%,which isprivately owned, including the overseas_funded firms. Although State_ownedfirms only account for one_third of the total, they dominate the country'seconomy by providing 85%of China's tax revenue, and China is notprivatizing the State_owned firms, but instead is gradually changing theminto share_holding enterprises, with the majority of shares held by theState.

Meanwhile, Liu Hong, director_general of China's State Statistics Bureau,said on September 2 that the nation can achieve its economic growth targetthis year despite further worsening of the Asian financial crisis. China'sgross domestic product for the first 6 months of the year was 3,473.1billion yuan ($418.4 billion), representing a relatively high growth rateof 7% over the same period of 1997. There are many favorable factors,including the encouraging situation in energy, raw materials, transportationand communications, low inflation and a good financial potential. Totalinvestment in fixed assets rose by 15.6% from January to July compared withthe same period last year. The effects of the government's economicstimulus measures have already appeared. The economy will be given renewedimpetus very soon from an active fiscal policy announced recently featuringa 100 billion yuan ($12 billion) issue of treasury bonds to finance thehuge package of infrastructure projects to be launched by the government.
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A senior economist with the State Council Information Center said recentlythat rumors about the possible devaluation of the yuan are intentionallyfostered by certain international fund companies seeking quick profits. Therumors have escalated in the wake of the sharp devaluation of the Japaneseyen. Black market traders have also been spreading the rumors, thinking itis time to make big money. It is believed that overseas liars could createmore sensational rumors in the future to further their sinister intentionsof speculation.

These rumors disregard the simplest economic rule, according to which theexchange rate of a currency is decided by the relation between its supplyand demand. The supply of foreign exchange in China includes the Stateforeign exchange reserve, foreign exchange assets of financial institutions,and the hard currency assets of enterprises and families, which amount to$220 billion in total. The annual demand for foreign exchange only amountsto $60 billion, including $40 billion to meet the requirements of threemonths' import payments and $20 billion for foreign debt repayment.Regardless of the country's gold and silver assets, the supply of foreignexchange in China is 160 billion greater than the demand. And the gap willwiden in the future as the country can anticipate a monthly trade surplus of$3 billion to $4 billion. It is, therefore, quite easy for China tomaintain the stability of the renminbi for the next one to two years. Infact, the rumor mongers know very well that they can never manipulate therenminbi's exchange rate through rumors. Their true intention is to attackthe Hong Kong dollar, hoping to make use of the rumors of devaluation of therenminbi to ruin the confidence of Hong Kong residents and destroy the HongKong_US dollar pegging system.
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The introduction of foreign funds is revitalizing agriculture in NorthwestChina's Shaanxi Province. Since the late 1980s, Shaanxi has used $160million to improve its agriculture and irrigation systems. In the past,agricultural investment mainly depended on central and local governments.Few thought foreign loans, investment or joint cooperation with foreignpartners could be paid off because of the great risks of agriculturalproduction.

With a change in old ideas about using foreign capital in agriculture,Shaanxi began making great efforts to improve its conditions and investmentclimate in order to attract foreign investment in agricultural development.In 1997, the province accepted 120 million yuan ($14.5 million) in loansfrom the World Bank for anti_poverty projects in southern Shaanxi's QinbaMountain, which lifted all farmers in Luonan, one of the poorest counties inShaanxi, out of poverty. The project has continued with another240_million_yuan ($28.9 million) loan this year which will further speed upthe drive. In northern Shaanxi, irrigation, water and soil conservation andrural water supply projects are also supported with funds from the WorldBank. Dingbian, a county that had suffered from water shortages in northernShaanxi, has been thoroughly relieved with a water supply project which wasbuilt with $30 million in foreign capital. In the recent years, Shaanxiintroduced in succession more than $20 million from theWorld Bank, Japanand Canada for the development of high_yield crops and the improvement ofcattle breeding. Good results have been achieved in these fields.

The introduction of foreign funds has not only resulted in more production,but has also helped train 360 high_tech agricultural technicians and bringadvanced agricultural productive management to the province. This has madethis old and traditional industry more profitable and competitive.
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Still placing a great confidence on the development of Beijing, foreigninvestors continue to pump in investment to the city. In the first half ofthis year, Beijing approved a total of 329 foreign_funded enterprises (FFE)involving a total contracted foreign fund of $1.022 billion, in whichinvestment came to $404 million and $618 million put in through newlysigned up contracts, an increase of 30.4% over the same period of lastyear. Statistics show GDP of Beijing reached RMB83.9 billion in the firsthalf of this year, increasing by 9.1% calculated on the basis of comparableprices.

Affected by the Southeast Asian financial crisis, investment from Asiancountries came only to $453 million, though a 2.82% rise over the sameperiod of last year in itself, it only accounted for 44% of the totalcontracted foreign investment to Beijing for this period, down 12 percentagepoints from last year's 65%. In contrast, contracted investment fromEurope and the US increased to $254 million and $149 million respectively,74% and 330% over the same period of last year.

In the first half of this year, more foreign investment put in Beijing'snew and high_tech enterprises with new and high_tech enterprises accountingfor 50% of the newly created projects in the secondary industry, and some30% of the contracted foreign investment going to new and high_techenterprises. Meanwhile investment in the existing projects also accountedfor a major part of foreign investment. For example, Siemens (China) added$55 million of investment input, and Panasonic Electronics (China) added$20 million of investment.

In the first half of this year, another 148 of the top 500 corporations inthe world made investment in Beijing for the first time with a totalcontracted foreign capital of $250 million, accounting for 24.4% of thecontracted foreign investment in this period. By the end of June, 323multinational had invested in 434 projects in Beijing by a total contractedamount of $3.63 billion.
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East China's Shandong Province has achieved 13% economic growth in thefirst seven months of the year, according to officials from the provincialstatistics bureau. During the January_July period, Shandong's industrialoutput value increased to reach 266.5 billion yuan ($32 billion), a figureaccounting for 8.4% of the nation's total. Meanwhile, it realized profitsand tax revenues worth 25.1 billion yuan ($3 billion), with a net profit of8.95 billion yuan ($1.07 billion).

The quick growth was partly attributed to Shandong's successful measures toalleviate the negative effects of the Asian financial crisis. SoutheastAsian countries have long been Shandong's major trade partners, and 75% ofShandong's industrial products are exported to these countries. However, inthe aftermath of the Asian financial turmoil this year, Shandong's exportsto the region plummeted.

After careful research of the overseas markets, the province decided toshift its focus to new markets in Europe, the Americas, the Middle East andAfrica. Shandong's exports to these newly developed markets increased byover 70% this year. Meanwhile, increased investment in fixed assets such asinfrastructure construction also helped the province.

By July, Shandong's investment in fixed assets totaled 58 billion yuan ($7billion), boosting its steel, glass and cement industries. Officials saidlarge and medium_sized enterprises have contributed greatly to Shandong'sbooming economy. In the meantime, private businesses and tertiary,service_related industry are accounting for some of the growth.

According to figures released by the provincial statistics bureau,Shandong's tertiary sector has gone up l2.6% in the first seven months,while privately owned enterprises racked up a 30% increase in industrialoutput value and taxes. Last year, Shandong's GDP increased 11.2% over1996 to reach 650 billion yuan ($78 billion). Provincial officials saidShandong will this year try to meet its development target of a 10% GDPgrowth over 1997.
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South China's Hainan Province will continue to develop its mining industryto boost its soaring economic growth. Hainan's mining sector has chalked upimpressive progress over the past few years. In 1996, the provinceregistered total output value of 764 million yuan ($92 million) from miningexploration, while related. mining processing industries chalked up outputworth 2.675 billion yuan ($322 million). Last year, Hainan's mining sectorachieved output worth 800 million yuan ($96 million), while the miningprocessing sector generated 3.5 billion yuan ($421 million) in output.These two sectors accounted for 18.6% of Hainan's total industrial outputin 1997.

Hainan will take advantage of its abundant mineral resources to support itsrapid economic growth. Hainan boasts 88 identified minerals, of which 63 areverified industrial_value reserves with a total economic potential of 207.4billion yuan ($25 billion). The island's verified reserves of zircon,ilmenite, iron, oil shale, tuff, geothermal water and mineral water rankfirst in China. Moreover, Hainan has proven reserves of 217.6 billion cubicmeters of gas and 415 million tons of quartz grit, accounting for 81% and31% of China's total respectively.

However, Hainan's mineral exploitation sector is still in its infancy, withonly 35 of the 63 verified reserves being exploited. Although many foreigninvestors have invested in Hainan's mining sector, their investment hasgone mostly to small and medium_sized mining enterprises, with few engagedin large_scale mining and refined mining processing industries. This trendneeds to be changed as the global market needs refined mining processingindustries and minerals with high added value. An important event in thisregard was the formation of a Mining Exploration Supervision office toforbid activities such as exploration without government authorization,transfer of mineral resource illegally in the form of transactions orleases, random exploitation and the destruction land waste of resources.
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Xian, the capital city of Shaaxi Province, offered recently the followingprojects for foreign cooperation.

Agriculture

l. A farm for planting vegetables £¦ floral. Investment: 56.8 million yuan($6.84 million). Form: joint venture, joint cooperation.

2. Expanding output of red food coloring from hot peppers. Investment: 80.13million yuan ($9.65 million). Form: joint venture, cooperation.

3. Kiwi fruit products. Investment: 95.4 million yuan ($11.5 million).Form: joint venture, cooperation.

4. Xi'an 3rd ring road. Investment: 8,500 million yuan ($10.24 million).Form: joint venture, cooperation.

5. A 700,000 ton/year cement plant. Investment: 873.16 million yuan ($105.2million). Form: joint venture, cooperation.

6. Lintong Power Station of Xi'an. Investment: 419.67 million yuan ($50.6million). Form: joint venture, cooperation.

7. The Trade and Exhibition Center of Xi'an. Investment: 124.5 million yuan($l5 million). Form: joint venture, cooperation.

8. The second phase of diversion work for Wangchuan river of Xi'an.Investment: 875.54 million yuan ($105.5 million). Form: joint venture,cooperation.

9. Degradable resin and production. Investment: 137.69 million yuan ($16.6million). Form: joint venture, cooperation.

10. Yong Nai Kang high energy food. Investment: 51.88 million yuan ($6.25million). Form: joint venture, cooperation.

11. A 300 ton/year acetyl propionic acid plant. Investment: 30 million yuan($3.6 million). Form: joint venture, cooperation.

12. IC card production line. Investment: 26 million yuan ($3.1 million).Form: joint venture, cooperation.

13. A package line for green £¦ fresh food. Investment: 24.8 million yuan($2.99 million). Form: joint venture, cooperation.

14. A disposal machine for food waste. Investment: 8.3 million yuan ($lmillion). Form: joint venture, cooperation.

15. A production line for colored steel gate, cold roll_up fabrication fordoors and windows. Investment: 49.8 million yuan ($6 million). Form: jointventure, cooperation, auctioning off, leasing.

16. A production line for producing glass bottles £¦ jars. Investment: 120million yuan ($l4.5 million). Form: cooperative management.

17. Upgrading technology for kraft board paper. Investment: 92 million yuan($11 million). Form: joint venture, cooperation, purchase, merger, leasing.

18. Electro deposited copper foil production line. Investment: 80.65 millionyuan ($9.7 million). Form: joint venture or other forms.

19. Compositor insulator. Investments: 28 million yuan ($3.4 million).Form: shareholding system.

20. Non_freon refrigerator compressors. Investment: 250 million yuan ($30.lmillion). Form: joint venture, cooperation.

21. Metal_air battery. Investment: 143.34 million yuan ($17.3 million).Form: joint stock cooperation.

22. Electronic fake_proof system for commodities. Investment: 126.3 millionyuan ($15.22 million). Form: joint venture, cooperation.

23. Development and mass production of series X_ray image intensifiers.Investment: 62.8 million yuan ($7.6 million). Form: joint venture,cooperation, foreign loan.

24. Large scale production of zinc oxide lightening arrestors with siliconrubber casings. Investment: 80 million yuan ($9.64 million). Form: jointventure, cooperation.

25. The upgrading of electrical £¦ electronic production line. Investment:127.9 million yuan ($l5.4 million). Form: joint stock.

26. The development of cold optical process. Investment: 25 million yuan($3 million). Form: joint venture, cooperation.

27. Increasing present capacity for the production of optical fiber £¦optical cable. Investment: 1,004.82 million yuan ($l21 million). Form:joint venture, cooperation.

28. Kit manufacturing for natural gas vehicles and the construction ofrefueling stations. Investment: 120 million yuan ($l4.5 million). Form:joint venture, cooperation.

29. The composite material tank for compressed natural gas. Investment:29.86 million yuan ($3.6 million). Form: joint venture, cooperation.

30. Xi'an Kaifa Commercial Tower. Investment: 40 million yuan. Form: jointventure, cooperation.
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With an increasing scale of using foreign investment to build up hydropowerstations in recent years, China has so far 23 pilot hydropower stations witha combined installed capacity of 18. 84 million kilowatts either in orhaving completed construction, involving a total contracted foreigninvestment of $3.692 billion. According to an official from the State PowerCorporation, China's hydropower resources available for development total376 million kilowatt_hours ranking first in the world. At present, 13 of theforeign_funded hydropower stations have gone into full operation. With acombined installed capacity of 5.622 million kilowatts, these projectsinvolved a combined foreign investment of $l.442 billion. The fivehydropower stations involving a total foreign investment of $1.396 billionstill under construction have a total installed capacity of 8.1 millionkilowatts.

China's development of hydropower resources is still at the low stage withthe total installed capacity of hydropower stations and the annual poweroutput accounting respectively for 13.8% and 9.7% of the explorablehydropower resources, all lower than the world's level. According to themedium_and long_term plan, China's total installed capacity of hydropowerstations will reach 70 million kilowatt by the year 2000, and 125 millionkilowatts by the year 20l0 to account for 33.1% of the total explorablehydropower resources. China plans to increase its installed capacity by anannual 3.5 million kilowatts in the coming years, and by 5 millionkilowatts annually between 2000 and 2010.
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China's largest offshore oil production base, the China Offshore Oil NanHai East Corp, produced a total of 50 million tons of crude oil by the endof August. This marks a new milestone in its ten years of crude oilproduction, according to a corporate statement. From the start of operationsat its first oilfield, Huizhou 21_1, annual production snowballed from138,000 tons in 1990 to 12.97 million tons last year. The rapid growth inoil production has brought in huge profits, totaling 45.14 billion yuan($5.44 billion) by the end of 1997. The company has also paid 5.61 billionyuan ($676 million) in taxes, of which 1.53 billion yuan ($l84 million)was paid to Guangdong Province.

This year, the oil producer plans to turn out 12.6 million tons of crude oildespite dropping prices on the international market. To this end, Nan HaiEast will continue to invite overseas oil companies to jointly look for oilin the east district of the South China Sea, which is believed to have 5billion tons of oil reserves. The company is a subsidiary of China OffshoreOil Corp and a major exploration company in the South China Sea. It hitdouble records last year in crude oil production and sales, pumping out l3million tons of crude oil and selling 207 tanker loads of crude oil, about12.9 million tons. That accounted for 80% of the country's total offshoreoil output. Nan Hai East is now the fourth largest oilfield in China,following Daqing in Northeast China's Heilongjiang Province, Shengli inShandong Province and Liaohe in Liaoning Province.

By working with overseas investors, Nan Hai East has developed nineoilfields in the South China Sea. Huihou 21_l was China's first commercialoffshore oilfield. It began production in the second half of 1989. Huizhou26_1, China's second commercial offshore oilfield, came on line in November1991. Two other Huizhou oilfields are 32_2 and 32_3, which startedproduction in September 1995. The Huizhou fields were all developed by ChinaOffshore and an Italian_United States_Dutch consortium, ACT OG, composed ofAgip (Overseas) Ltd of Italy Chevron Overseas Petroleum Ltd of the US andTexaco Petroleum Maatschappij (Nederland) BV. Liuhua 11_1, China'sbiggest offshore oilfield, which started pumping oil last March, was jointlydeveloped by China Offshore, the American Amoco Orient Petroleum Co andKerrMcgee Liuhua Ltd. Other oilfields developed by China Offshore includecontributions from these foreign companies: Japan's JHN group; PhillipsPetroleum International and Pecton Orient Co of the United States;and a Norwegian corp.
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Guilin's foreign trade has increased rapidly during the past few years.Beginning in 1995, the city's foreign trade volume has exceeded $100million for three consecutive years, while in 1997, the volume of totalexports and imports volume topped $77.93 million and $13.13 million.Foreign_funded enterprises played a major part in the city's exports, withexports volume reaching $57.65 million. Guilin now has 33 foreign tradeenterprises, exporting 240 varieties of goods to over 53 countries. Amongthese exports, the value of gold and silver exceeded $10 million for sixconsecutive years. Guilin had approved 754 overseas contracts valued at$2.01 billion by the end of last year. The United States remained Guilin'smajor trade partner during the past 10 years. In 1997, the volume ofGuilin's imports and exports with the United States reached $1.12 millionand $25.26 million, accounting respectively for 1.4 and 19.24% of thecity's total foreign trade volume. Major imported goods from the UnitedSates include alkaline, glassware and wireless communications equipment,while exported goods consist mainly of cotton clothes, copper pipes, zincand tyros. The United States has established 23 enterprises in Guilin with atotal investment of over $51.9 million, mainly in the field ofpharmaceutics, health care products, cosmetics drinks, cement products andreal estate.

The tourism industry has grown to become one of Guilin's pillar industriesafter years of accelerated development. The city, which has the capacity tohost 1 million overseas tourists and 10 million domestic tourists, earnedover 2.8 billion yuan ($337 million) from tourism in 1997. To date, Guilinhas hosted over 6 million tourists from more than 10 countries, in additionto a number of high_ranking governmental officials. The city now has 32international hotels, 29 star_rated hotels and 430 hotels which mainlytarget domestic tourists. The city also has 17 international and 52 domestictraveling agencies with over 40,000 employees. Of these, over 1,000 are tourguides proficient in foreign languages.
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China's production of sewing machines assumes a top position in the worldover the past 10 years. With the speeding up of economic globalization inrecent years nearly all renowned producers of sewing machines the world overplace great hope at China's sewing machine market and one after the othershifted their sewing machine production to China to a faster upgrading ofthe level of sewing machine production in the country and then help it tobecome a sewing machine production center in the world. According to figuresprovided by the State Light Industry Bureau, the world altogether produced12 million sewing machines a year in the mid_1990s and the total would evenbe less at present. China churned out 5 million such machines in 1997,making up over 40%of the world's total to stand first in the world.

In spite of the great output, there is great demand for sewing equipment inChina as it is also the biggest clothing producer in the world. This is whymajor sewing machine firms from Japan, the US, Germany, Italy and SouthKorea have set up 49 joint ventures or solely_owned factories in Tianjin,Xi'an, Zhuhai, Shenzhen, Ningbo, Langfang and other Chinese cities inrecent years with 11 of the factories being created under a total investmentof over $5 million each. It is anticipated that more foreign sewing machinefirms will build up factories in China as assembling of sewing machinescannot be totally automated.

The quality of China's home_made namebrand sewing machines has been rapidlyimproved with machines under the brands of Standard, Shanggong, Feiren,Butterfly and South China having commanded a good sale in the worldmarkets. Specialists estimate that China's total export of sewing productswill keep growing on the basis of the great growth in 1997 and total importwill show a structural decline. This is mainly because a greater rate ofproducts of foreign_funded enterprises (FFEs) have to be resold overseas tofill up orders of the enterprises' parent firms.
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Merial SAS. a leading French animal health products company, signed a $12.4million joint venture contract late in August in Nanjing to make poultryvaccine. The 50_50 joint venture is scheduled to be ready for operation atthe end of next year. The Chinese partner is the 65_year_old NanjingPharmaceutical and Instrument Factory. The Nanjing_Merial Animal HealthLimited Corp can make 390 million doses of avian inactivated vaccinesannually. The joint venture is essential to China's growing animalhusbandry industry, which is now the largest livestock and poultry producerin the world. At present, China is still at the stage of research anddevelopment for urgently_needed vaccines. Therefore, the introduction ofFrench advanced vaccine technology will speed the development of China'sverinary products industry.
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European telecom leader Nokia has shown its confidence in the Chineseeconomy and its market potential by pledging to double its investment herein the next two years and establish two more ventures. Nokia has opened sixjoint ventures in China, mainly manufacturing mobile phones, GSM stations,networks, switches and other communications products. The joint ventureshave started to export accessories including chargers and batteries toother markets, mainly in Asia but also to Europe and the United States.China aims to invest 2,910 billion yuan ($350.6 billion) in infrastructurethis year to stimulate domestic demand. Investment in telecommunicationsalone will amount to 150 billion yuan ($18.07 billion), up 20% over lastyear.
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Tang Energy Group Ltd of the United States is expected to invest $40million to build two wind_powered electrical_generating farms in XinjiangUygur Autonomous Region in cooperation with a local wind_power company.According to an agreement signed recently , the projected wind_powergenerating farms, each with an output of 20,000 kilowatts, will use 600_kwwind_driven generators developed by the Xinjiang Wind Power Co. TheXinjiang region abounds in wind_power resources with nine major wind zonesin a combined area of more than 150,000 square kilometers. These zonespotentially may produce more than 800 billion kilowatt hours of electricityannually.
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A joint venture between the Beijing Telecommunications Administration (BTA)and Nippon Telegraph £¦ Telephone Corp (NTT) of Japan was launched onSeptember 7, with both investors vowing to tap the robust communicationsmarket in China. The new company, Beijing Telecom NTT Engineering Co Ltd has$3 million in registered capital. The joint venture will focus its businessmainly on network integration and setting up systems tailored to customers'communications needs. The company will provide design, construction andmaintenance services for the integration of customers' terminalcommunications systems. It will also offer consultations for customers inoperations management of public communications net_works and in promotingnew businesses.
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