China is moving towards creating more securities investment funds and investment banks in a joint_venture format. The China Securities Regulatory Commission (CSRC) is working closely with lawmakers to set legal standards for joint venture securities_investment funds, according to its Chairman Zhou Zhengqing. Once a regulation is in place, domestic and foreign parties can start launching securities_investment funds. Late in April, China created its 10th domestically funded securities_investment fund as part of its efforts to raise the number of institutional investors trading in its fledgling securities markets. All 10 closed_end mutual funds have a registered capital of 2 billion yuan (”ē240 million).

Earlier in May, sources had indicated that at least six fund_management companies, based in Hong Kong and abroad, have joined up with financial institutions on the mainland to prepare for entry into the Chinese fund_management market. In addition to the investment fund initiative, more foreign investment banks will soon be allowed to set up joint ventures in China. China International Capital Cooperation was the first joint venture bank, funded by China Construction Bank and Morgan Stanley. The number (of joint venture investment banks) is expected to grow in the next few years.

As to the stock listings, CSRC revealed that China will no longer list shares of State_owned enterprises, or H shares, in Hong Kong in batches. The Commission had presented five batches of H shares on the Hong Kong stock market, but it has revised its approach and there will not be a sixth batch. The rule now is that individual companies will be cleared for H_share listing when they are ready.
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Overseas lawyers will be able to play a greater role in China¬šs legal service __ once the country joins the World Trade Organization (WTO). Wu Mingde, deputy director of the Department of Lawyers and Notation of the Ministry of Justice, said recently that China is likely to lift the current geographic ban one year after entering the WTO. At present, overseas law firms are allowed to open branches in 15 cities in China. But so far, branches have been set up in only eight cities, including Beijing and Shanghai. The overseas law firms will also be allowed to open more than one office in China __ after the nation gains accession to the WTO.

However, the setting up of joint venture law firms __ co_funded by Chinese and overseas investors __ will still have to wait. Last April, another 12 overseas law firms were given the green light to open offices in China, increasing the total to 105, of which 26 came from the Hong Kong Special Administrative Region.

Overseas law firms first emerged in China in 1992. Another 100 overseas law firms are in the process of applying to enter China¬šs legal service market. The resident overseas lawyers are today mainly involved in representing domestic clients in legal disputes abroad. They are serving as legal counsel to both domestic and foreign clients on matters of trade, technology transfer, real estate, intellectual property rights, bonds and securities.

The expanding role of overseas lawyers will pose strong competition for their Chinese counterparts in the short term. But in the long run, they may spur the domestic lawyers to upgrade themselves, in both professional standards and business skills. They will bring in their multinational clients, which will, in turn, create more business opportunities for Chinese lawyers. China¬šs law profession was restored in 1979, after a total eclipse lasting nearly 20 years. The country now has about 110,000 lawyers working in some 9,000 law firms. Though most of China¬šs lawyers have received a college education of two years and above, only one_third of them have obtained degrees in law.
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China plans to draft a public tendering law to safeguard the quality of government_financed projects. The law will stipulate that all projects funded by the State budget must use public tendering, Li Rongrong, vice_minister of the State Development Planning Commission said recently. The spending on infrastructure since last year was definitely the right choice to invigorate the economy and pave the way for China¬šs growth in the next century. But the government also faces a challenge in ensuring the quality of the projects. The challenge was highlighted by the recent collapse of a government_funded bridge in Chongqing in Southwest China, which killed 40 people. Construction of the bridge was not open to public tendering. Careless choice of the project contractor was a major reason for its poor quality.

Experts said less than 20£„ of public projects used public bidding. And the bidding was treated as a formality by many of the project managers that do use public tendering. The central government attached great importance to the quality of projects in the infrastructure construction program. Earlier this year, the State Council held a national conference on this topic, at which a regulation was passed stipulating that proprietors and managers of the infrastructure projects would bear a lifetime responsibility for them. Besides project quality, risks related to the infrastructure program also include ineffective management of budget deficits, hasty feasibility studies and fund misallocation by local governments. A considerable part of the funds for the infrastructure construction program comes from the central government¬šs treasury bond issuance to State banks.

Although the possibility of inflation caused by the growing deficit can be ruled out owing to mounting bank deposits and falling prices, the State¬šs weak fiscal power means the government must be very careful in expanding its deficit. In the long run, the government should try to eliminate the deficit gradually. To avoid the problem of poor feasibility studies, the government has focused on projects that had concluded their feasibility studies before the infrastructure program was suggested. The central government was very vigilant over local governments¬š mismanagement of the funds. Financial authorities have suspended fund allocation to local governments that were found to have misused the money.
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China will reinforce its support of the ongoing reforms in the textile sector this year by giving more quotas and export rebates to producers of the sector, a deputy_director with the State Economic and Trade Commission said recently. The government will continue to help the textile sector overcome the difficulties that could meet so as to facilitate the whole three_year restructuring package of the textile industry.

The State Council proposes to grant the textile sector 20£„ of the total export quotas this year, up 5 percentage points from last year. Export rebates will also be enhanced 2£„ to 15£„. Such measures aim at increasing exports of textile products, traditionally one of the country¬šs biggest export items. Affected by the financial turmoil in Southeast Asian countries, the sector¬šs exports saw a negative growth of 5.87£„ last year, sharply down from 22.6£„ growth in 1997, resulting partly in the 0.5£„ growth of the country¬šs total exports.

The deputy_director reminded that the preferential policies granted by the government last year will still be valid in 1999. The reserve fund available to write off bad loans in the textile sector this year is likely to be more than the amount in 1998. The reserve fund, which stood at RMB12.5 billion (”ē1.51 billion) last year, contributed most to textile sector¬šs loss cut of RMB2.6 billion (”ē313 million). The write_off scheme last year had extended help to 134 bankrupt companies to bankruptcy and 217 enterprises to merge. The reserve fund allocated to the textile sector this year will focus on the bankruptcies of loss_making companies, rather than acquisitions and mergers, since bankruptcy is the key to diminishing the oversupply and doing away with the low_level scale operations of the sector. The loss reduction target is set to RMB3 billion (”ē361 million) this year.

Despite the government¬šs exclusively preferential policies, the textile sector faced more difficulties to meet this year¬šs targets. The campaign of spindle elimination and worker dismissal will concentrate on the interior areas instead of coastal areas this year.
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Chinese officials and economists are discussing the way out for special economic zones (SEZ) which may have their tax breaks for investors affected upon China¬šs joining the World Trade Organization (WTO). The SEZs have scored great achievements since their establishment in 1984. But problems still exist in the zones and is essential to tackle them promptly, because China is readjusting its policy towards the zones and quickening steps to open its domestic market wider to the outside world.

Development zones of various kinds have been one of the main vehicles for attracting foreign investment over the past 20 years in China. They offer tax breaks and other preferential policies for foreign investors. State_owned enterprises have long viewed such treatment as unfair, because it applies to only a select few. As China bids for its membership in the WTO, it has made dramatic concessions especially in terms of tariffs. China is to open more markets to foreign companies. In other words, the historical economic zones might see their former tax advantage waning, as more and more other regions come up with similar attractions.

Lower tariffs and more intense foreign competition may be a good chance to help reshuffle State_owned enterprises. Busy preparing for China¬šs entry into the WTO, the country¬šs financial administration is taking measures to standardize the tax system, smooth the distribution official resources. promote foreign trade and provide a good social environment with fair competition. Some preferential terms previously enjoyed by companies in the economic zones are unlikely to be extended when they expire. Though preferential policies granted to the development zones are being gradually phased out, foreign_invested companies can still make money. They are the early birds who have already established a strong foothold in the Chinese market. China now has 32 such zones, which achieved an industrial output value of 293.8 billion yuan (”ē35,4 billion) last year.
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Five foreign travel agencies have formally filed applications to set up joint venture travel agencies in China, following the government¬šs go_ahead for an increase in such activities to open up the sector. Increasing numbers of overseas travel agencies have expressed their interest in such ventures after the Provisional Rules Governing the Establishment of Sino_Overseas Travel Agencies were introduced on a trial basis last December. It represents a further step in China¬šs opening policy after overseas travel agencies were first allowed to set up joint ventures on a trial basis in the country¬šs 12 national holiday resorts in 1992.

To date only one Sino_Swiss travel agency has been given permission to set up a joint venture in the Dianchi Lake Holiday Resort in Kunming, capital of Yunnan Province. The new policy will be conducive to accelerating the internationalization of China¬šs tourism industry, to using the international sales network to help expand China¬šs inward bound tourism figures, and to improving the quality of China¬šs own travel agencies. Some officials acknowledged that it may aggravate competition in the country¬šs travel sector, warning that perhaps expansion should be introduced gradually.

According to the current proposals, only one such joint venture travel agency is allowed for each of the provinces, autonomous regions and municipalities. The interim rules do not allow joint venture travel agencies to be engaged in the outbound market. At present, only 67 Chinese travel agencies have approval to handle outbound tours. To improve the quality of travel agencies, the government¬šs watchdogs revoked the business licenses of about 1,500 unqualified travel agencies in 1995. And the following three years saw a similar ruling applied to an average of 400 travel agencies annually.
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China has in recent years increased investment by a big margin in its western regions, in a bid to prompt new economic growth and narrow the gap between the country¬šs interior and coastal areas. All provinces and regions in the western part of the country last year received a record number of fixed assets investments.

In 1998, the Guangxi Zhuang Autonomous Region invested 57 billion yuan (”ē7 billion) in fixed assets, which represented an 18.8£„ growth over the previous year. The funds were used for the construction of 70 key projects ranging from expressways to railways and port projects. The southwestern province of Guizhou last year spent 31.5 billion yuan (”ē3.81 billion) on local infrastructure projects, which is the largest investment the province has ever made during the past five decades. Some 22£„ of the investment was injected in developing local transportation and telecommunications. The northwestern province of Gansu in 1998 invested unprecedented amount of 33.1 billion yuan (”ē4 billion) in fixed assets in 33 infrastructure projects. The construction of infrastructure projects has contributed 4.2 percentage points to the 9.2£„ economic growth the province achieved last year.

Statistics from the National Statistics Bureau show that in 1998, investment growth for the western regions reached 31.2£„, 14.9 percentage points higher than that of the eastern regions. Most of the money raised last year through the issuance of 100 billion yuan worth of special State treasury bonds for infrastructure construction, has flowed into the western regions. Related sources revealed that China has planned to invest more than ”ē750 billion in capital construction in the three_year period starting 1998, and that the central and western regions will remain the focus of the investment.
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China¬šs project_contracting and labor_service sector progressed rapidly in 1998 despite bearing the brunt of the Asian financial turmoil. Shi Guangsheng, head of the Ministry of Foreign Trade and Economic Co_operation (Moftec), announced recently that China signed ”ē11.77 billion of overseas contracts last year in engineering, labor services, design and consultancy, a 3.7£„ increase over the previous year. Sales volume soared 20.9£„ to hit a record ”ē10.13 billion, bringing the cumulative total to ”ē58.37 billion. Last year saw a rise in the number of projects contracted by domestic companies, and in the scale and quality of external project contracting and labor services.

Moftec will try harder to promote the development of China¬šs external project_contracting and labor_service business this year. Last year, global construction investment totaled about ”ē3,200 billion, but China only accounted for 1_2£„ of the global contracting market and 1£„ of global labor flows, so there is still great potential to expand. Moftec is expected to continue reform of the management mechanism of China¬šs external project contracting and labor services this year. An additional effort will be made to guide and encourage large companies and groups with the ability to do so to enter the global market.

Domestic enterprises are urged to accelerate their market diversification drive. Currently, more than 60£„ of this business is conducted in the Asian region, although the financial turmoil has squeezed it hard. While maintaining East and Southeast Asian markets, domestic companies should also try to recapture the Middle East market and tap the African, Latin American, European and US markets. Chinese companies are urged to continually enhance the quality of their work.
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The China ¬š99 International Horticultural Exposition, which opened in Kunming on May 1, is expected to serve as a driving force for Yunnan Province¬šs economy. Provincial statistics show that Yunnan¬šs investment in fixed assets totaled 8.046 billion yuan (”ē969 million) in the first quarter of the year, up 40.4£„ from the same period last year. Officials said Expo ¬š99 has given a big push to the provincial economy. To host the world garden show, Yunnan has so far injected more than 20 billion yuan (”ē2.4 billion) into infrastructure projects. It is the first world exposition China has ever hosted. The 184_day event is attended by 95 countries and international organizations and expects to attract 10 million visitors.

Expo ¬š99 benefits many areas. It can help build up China¬šs image and facilitate a wider opening_up of the province. It is conducive to the implementation of a sustainable development strategy, fostering pillar industries, and improving the city¬šs infrastructure. Yunnan has seized this unprecedented opportunity for development at the turn of the century.

Kunming¬šs infrastructure and the quality of life of its citizens also received a great boost from the opening of the event. This capital city of Yunnan has allocated about 10 billion yuan (”ē1.2 billion) in order to be at its best during the horticultural show. Yunnan also mapped out plans for developing the biological industrial sector as well as tourism, striving to increase the industrial output value in these two sectors. Economists pointed out that Expo ¬š99 has done a lot to stimulate Yunnan¬šs economy.

Only one day after its opening, rich fruits have been reaped at the Beijing Week for the ¬š99 Expo. 29 investment projects were signed on May 3, which included 14 contracts, 8 agreements and 7 letters of intent. The 29 projects totally absorbed 1.2 billion yuan (”ē144 million) from home and abroad, of which ”ē119.4 million are foreign direct investment. The projects cover modern agriculture, tourism, horticulture and agricultural machinery.
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East China¬šs Anhui Province has achieved all_round economic growth since the beginning of this year as a result of local efforts to increase domestic demand and investment in infrastructure. The provincial government reported that in the January_February period, industrial value_added production amounted to 5.83 billion yuan (”ē705 million), an 11.3£„ increase from the same period in 1998. Large and mid_sized industrial enterprises increased production by 7.5 percentage points on a yearly basis.

Output of most of the 43 local major industrial producers is on the rise, with coal, electricity, cement and rolled steel output up a great deal. Retail sales rose 6.9£„ on a year_on_year basis to more than 17 billion yuan (”ē2 billion) during the period, with growth in urban areas above 8.1£„. The province had ”ē300 million worth of foreign trade, up 12.2£„ on a yearly basis, and exports were up 12.4£„ to ”ē190 million. It invested 1.69 billion yuan (”ē204 million) in fixed assets during the two months, a rise of 71.7£„ over the 1998 figure. Revenues were up 29.4£„ to 2.86 billion yuan (”ē345.8 million) on a yearly basis.
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The economy of Guangdong Province will run smoothly with only subtle fluctuations this year. Last year¬šs overall economic recovery is expected to continue into the first half of this year. The conclusion is based on the following factors: the government is to maintain an active fiscal policy this year; production of raw materials has been accelerating while their stockpiles have been falling; investment has also gone up with an increasing number of projects being launched last year and the sixth interest rate cut will help improve the overall business situation in enterprises.

Last year, Guangdong¬šs economy saw a recovery from contraction and gained momentum in the latter half of the year thanks to the government¬šs policies. Last year, the province¬šs fixed assets investment increased by 12.9£„ year_on_year, following two years of stagnation. However, the growth pace may slow down this year unless new economic growth areas appear, since it is difficult to retain the growth in exports and the exceptionally active investment. Expected economic growth of the province is 8.5£„ and fixed_assets investment growth is 8£„ this year. Last year, Guangdong realized a gross domestic product growth of 10.1£„. The economic performance in the first month of this year verified some officials¬š predictions. In January, the economy remained stable, shrugging off the influence of seasonal factors. Industrial output grew at 12.7£„ year_on_year. However, exports fell by 24.1£„. Economic prospect in the latter half of this year, unclear at present, hinges on whether the current monetary fiscal policy will trigger sufficient consumer demand.

Guangdong¬šs machinery manufacturing industry is stepping up efforts to upgrade its product structures and to exploit high and new technologies to win larger market shares at home and abroad. Guangdong is focusing more on the production of electrical appliances, special machines, instruments and meters as well as office facilities. The province is attaching more importance to the production of complete sets of equipment for urban and rural power transmission and distribution, environmental protection and agricultural production. The province is also revamping its automobile and motorcycle enterprises. Guangdong will lay greater emphasis on the development and industrialization of computerized optical, mechanical and electrical integration equipment, new types of power transmission and distribution equipment, high precision instruments as well as large complete sets of equipment. The province is also encouraging global multinational consortia to join hands with its promising machinery manufacturers to speed up their technological upgrading and industrial adjustment. With the product structure optimized, Guangdong hopes to tap wider global markets.
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11. High_frequency welded steel pipes and hot_dip galvanized steel pipes project

12. Lamp and lantern project with an annual production capacity of 400,000 sets

13. Expansion of the production of steel balls

14. Expansion of the production of natural chlorophyll to 300,000 tons a year

15. Suixi County Silk Reeling Factory: processing with supplied material or production restructuring

16. Shares transfer of textile printing and dyeing factory

17. Expansion and technical upgrading of a sugar refinery

18. Technical upgrading of anhydrous citric acid project with an annual production capacity of 5,000 tons

19. Production of condensed pineapple juice

20. Natural caffeine project with an annual production capacity of 5 tons

21. Sulphuric acid production with liquid sulfur as raw material

22. Ionic membrane caustic soda project with an annual production capacity of 20,000 tons

23. Cyclohexylamine project with an annual production capacity of 1,000 tons

24. 20,000_ton phosphate acid production and its by_products

25. White carbon black production with an annual capacity of 5,000 tons

26. Processing of rubber products

27. Expansion of the production line for mold formed flame_proof door plank and door frame

28. Expansion and technical upgrading of the production of additives with an annual production of 20,000 tons

29. PVC compound foamed pipes project

30. Manufacturing of large and medium_sized harbor machinery

31. Yacht manufacturing project

32. Technical upgrading of diesel engines for farming vehicles

33. Expansion for the production of automobile components and spare parts

34. Production of automobile lubrication pumps, water pumps and spare parts

35. Production of piston and piston pins for automobiles

36. Production of rack_and_pinion steering gear for automobiles

37. Manufacturing of molds and dies

38. Production of frequency variators and electric motors without commutators

39. Production of all plastic local telecommunication cable

40. Technical upgrading and expansion for the production of aluminum electrolysis capacitors

41. Production of SMD inductors

42. Production of nickel_hydrogen batteries (rechargeable batteries)

43. Production of optical fiber and pre_fabricated fiber rods

44. Production of pressure_sensing computer graph maker

45. Construction of a farming base for tropic fruits

46. 2,000 hectares of sisal hemp farm

47. Production line for fast frozen dehydrated vegetables

48. Zhanjiang Huguang lean_meat pigs farm

49. Zhaniiang high_quality beef cattle farming base

50. Industrialized incubation and cultivation of abalone

51. Construction of Zhanjiang Ocean Cultural Center

52. Wuchuan Jizhao Coastal Tourist Resort

53. Basha Bay Tourist Resort
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China¬šs advertising industry achieved great success last year despite the world¬šs sluggish economy. Statistics indicated that the business volume soared to 53.78 billion yuan (”ē6.48 billion) last year, up 16.4£„ from the previous year. State policies to encourage consumption contributed greatly to the development. Despite the Asian financial crisis, the Chinese Government maintained the value of the renminbi and achieved a 7.8£„ economic growth last year, thus providing a healthy climate for enterprises to secure their advertising expenditures.

In order to push economic growth, the government has implemented measures to stimulate domestic consumption to counteract the negative impact of the financial crisis. In a bid to grasp golden opportunities, many businesses carried out wide advertising campaigns to promote their products. For example, the real estate and insurance sectors widely advertised. More enterprises are gradually aware of the importance of advertising as a promotional tool in the market_oriented economy. This awareness is also another key factor for the growth in the advertisement industry.

Under fierce market competition, domestic enterprises need advertisement to inform consumers and generate interest for products. According to the CAA, there were 61,730 advertising agencies across China with 578,876 employees by the end of 1998, an increase of 8.25£„ and 6.06£„ over 1997 respectively. For this year, it is predicted a growth rate over 10£„ on the basis of last year¬šs performance. The great market potential of China still needs to be explored. To grab a share of that market, foreign advertising companies have continued to squeeze into the Chinese market. Statistics indicated that by the end of last year, there were about 500 joint ventures in the industry, with a business volume reaching 3.68 billion yuan (”ē444 million). Although the sector made considerable achievements, some problems remain. Professional expertise and quality services still need to be improved to enhance competitiveness. Domestic advertising companies need to strengthen technical cooperation and exchange with their overseas partners to sharpen their competitive edge and meet market demand.
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In a bid to improve environmental protection, development of green packing materials to replace traditional plastic packing has become an issue of great importance in China. Market potentials for edible packing materials are huge in the country, and Chinese packing material producers are urged to pay great attention to this. The country currently is in need of nine varieties of edible packing materials.

1. Edible soybean wrap. The soybean wrap has the character of keeping oxygen out to reserve the original taste and moisture content of the food it wraps.

2. Edible bean dregs wrap. Being dissoluble in hot water, this kind of wrap is particularly suitable to pack flavorings in instant noodles.

3. Compound edible wrap of protein, fatty acid and starch. The wrap mixes protein, fatty acid and starch together in different proportions to provide different physical properties.

4. Edible chitosan wrap. Chitosan, which can be found in cell walls of plants and in shells of crustacean, is very effective in keeping fresh fruits with peels reeled off.

5. Water_resistant protein wrap. Made of zein, being biodegradable and friend to environment, the wrap is a good replacement of foam polyethylene packing materials to pack pop snacks.

6. Edible packing containers. Such containers are mainly used to contain potato flakes and in their processing various flavorings can be added, to suit different tastes of customers.

7. Zein wrap. Being made of a combination of paper and zein impregnable by oil, this kind of wraps are mainly used as fast_food box and coated packing of oily foods to keep properties unchanged when boiling.

8. Shellac or protein coated packing paper. The paper, processed from shellac or protein by special techniques, can bear certain degrees of temperature and prevent water soak.

9. Biocolloid coated packing paper. The wrap is a kind of paper coated with a special mix of starch, bone glue and additives, and as resistant to water and oil it can be used to contain fast_foods and foods with certain degree of temperature and moisture content.
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China expects to develop the Tarim Basin in northwestern Xinjiang Uygur Autonomous Region into a major oil and gas production base by early next century. Large_scale development of oil and gas fields is proceeding smoothly. Geologists have discovered 13 fields in the basin with combined deposits of 300 million tons of oi1 and 220 billion cubic meters of natural gas. Plans for 1999 call for verifying an additional 40 million tons of oil and 300 billion cubic meters of natural gas in the basin, which covers an area slightly larger than France. Verified oil reserves are expected to reach an accumulated 1 billion tons by the end of next year, with verified natural gas deposits of 500 billion cubic meters.

The Tarim Basin, an area known as a ­·Sea of Hope," offers potential oil reserves of more than 10.7 billion tons and natural gas reserves in excess of 8.4 trillion cubic meters, accounting for about 13£„ and 25£„ of the current national total, according to an official resource assessment report. Developing the Tarim oil base will help China reduce its reliance on oil imports and increase exports in the future. The China Oil and Natural Gas Corporation initiated its oil exploration effort in the Tarim Basin in April 1989.

A modern oil exploration system has been created in the basin in spite of difficulties resulting from sandstorms which hit the area every four days on average and the fact that oil reservoirs are usually found at depths of 5,000 meters. Facilities that have been built to support the Tarim effort include oil pipelines stretching more than 1,000 kilometers, an advanced telecommunications network and a 522_kilometer north_south desert highway. The introduction of large oil platforms and the use of advanced drilling technologies have reduced operating costs in the basin. The current drilling rate has doubled the level of the early 1990s to stand at 1.6 meters per hour, according to the headquarters. The Tazhong No 4 Oilfield in the Taklamakan Desert, the world¬šs second largest, was discovered in 1992. The field¬šs current oil output accounts for 22£„ of the basin¬šs total. Since 1997, three oil and gas zones with combined natural gas deposits of 420 billion cubic meters have been found in the basin, making the Tarim Basin one of the nation¬šs three largest gas producing areas. Statistics show that more than 20 million tons of crude oil have been produced in the Tarim Basin during the past decade.
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China¬šs ship_building industry ranked third in the world in the output of vessels and diesel engines over the past three years, establishing an export_oriented industry with an international competitive capacity. The China Ship_Building Industrial Corp has exported a total of 4.65 million tons of vessels between 1996_98, outstripping Japan and the Republic of Korea, the world¬šs main ship_building manufacturers, by 15£„ and 32£„ respectively. The company exported ”ē3.6 billion worth of products during the three years, far exceeding the growth of other mechatronic product exported by China. Today, China exports vessels in large numbers to more than 50 countries and regions, including the world¬šs top nine shipping countries. Larger ships with high technology and added value are being developed for the export market.

An overall breakthrough has been made in tackling key scientific and technological problems and in technological innovation. Ships for transporting chemicals, liquefied natural gas and bulk cement, as well as those complete with automatic unloading facilities, have been successively developed and exported. The sector now has 10 ship repair yards and eight dockyards to mend foreign ships, with an annual output value exceeding 100 million yuan and ”ē10 million respectively. Since 1996, exports from China¬šs local shipyards have developed rapidly. In 1997, there were 15 local shipyards with respective exports exceeding ”ē5 million. The export of some of them accounted for 90£„ of their total output.

The ship_building industry is striving to enhance its competitiveness in the domestic and international markets through corporate restructuring and technical upgrading. The government has begun to value the importance of the ship_building industry as a primary foreign_exchange earner and is encouraging it to expand its share of the international and domestic markets.
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A ”ē454 million foreign_contracted power project in Central China will be constructed mainly with domestically manufactured equipment, falling in with the country¬šs move to expand domestic demand. Sithe China, a subsidiary of Sithe Asia, recently signed a landmark deal with Shanghai Advanced Power Projects Co and Hubei Electric Power Co to help balance hydro and coal_fired power sources in Hubei Province and provide electricity to the country¬šs west_central regions. Sithe China owns 75£„ of the 2x300 megawatt power plant, located in Chibi in Hubei Province, and the Marubeni Corp of Japan owns 25£„. An integrated power development company, Sithe China now has six projects in China, with a planned total capacity of 1,500 megawatts. China_made equipment has been widely used in the projects, and the proportion of the domestically manufactured equipment will continue to increase. In addition to the Hubei project, a coal_fired plant to be constructed in Shunyi in Beijing Municipality will help improve the environment of the Chinese capital.
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More than ”ē420 million worth of contracts were inked recently in Beijing between China Power Grid Development Co Ltd and two foreign companies __ ABB Power System and Siemens AG. The endorsements included contracts for converter stations, equipment and transfer of technologies, contracts for co_production, and loan agreements for a high_voltage direct current (HVDC) power transmission project linking the Three Gorges to Changzhou. According to the contracts, ABB clinched an order to supply two converter stations for a 3,000_megawatt HVDC power link to transmit electricity from the Three Gorges hydropower plant in Central China to the coastal city of Shanghai and the surrounding area. The order also included converter valves and transformers, switchyard and control equipment. One converter station will be located at Longquan, Hubei Province, approximately 50 kilometers from the Three Gorges power plant, and the other in Changzhou, a city in Jiangsu Province, roughly 80 kilometers northwest of Shanghai. Sources from the Three Gorges Construction Committee said the project will be the country¬šs largest power link to connect Central and East China and is scheduled to come into commercial operation in 2003. The Three Gorges link is expected to transmit 4,200 megawatts of electricity.
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China National Chemicals Import add Export Corp (Sinochem) signed a ”ē50 million worth potash fertilizer import contract with the Canada_based Canpotex Co in Beijing recently. The imported Canadian potash fertilizer will guarantee sufficient supply of potash in China during the spring ploughing period. China is currently the world biggest potash fertilizer importer, with an annual import volume ranging 4_5 million tons. As one of the leading import and export companies in China, Sinochem has been China¬šs main channel for fertilizer imports and also the biggest buyer of potash fertilizers in the global market. More than 3 million tons of potash fertilizer are imported by Sinochem annually.
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Trade and economic links between China and the Netherlands will be further promoted. The two economies are highly complementary. The Netherlands¬š advanced technology and management know_how in the chemical, agricultural and transportation sectors are what China needs to develop its economy. China attaches great importance to economic links with the Netherlands, China¬šs fourth biggest trade partner and foreign investor among West European countries. According to statistics from China¬šs Ministry of Foreign Trade and Economic Cooperation, Dutch enterprises had pledged ”ē3.4 billion by the end of last year, investing in 646 projects in China.
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