The government is contemplating a series of measures to improve the competitiveness of small and medium-sized enterprises (SMEs). Policy makers and think-tanks in China are designing a package of short-term incentives to expedite the development of SMEs, according to Wei Dong, director of the Small and Medium-Sized Enterprises Department of the State Trade and Economic Commission. The package will include technological, legal, financial, fiscal and social service measures. Wei's department was established only last year in the government restructuring process to manifest the government's new emphasis on SMEs. The Commission is selecting cities to run a pilot plan, under which universities and research institutes will develop affordable and plausible technology and products for SMEs. Better-off local governments can establish technical renovation funds.

The commission will also encourage SMEs to build a basis for sound cooperation with big enterprise to obtain stable technical support and investment. The commission encourages setting up technology incubators, training technology agents and holding patent fairs to facilitate the flow of technology to SMEs. Meanwhile, the government will tighten control and even ban the opening of those SMEs which do not have a market, consume large amounts of energy, pollute the environment and waste resources to make sure that the development of SMEs coincides with the industrial policies of the State.

The competitiveness of most SMEs is crippled by lack of capital and difficulties in getting loans from commercial banks, which are wary of lending to smaller companies in view of the perceived higher risks involved. That situation has not changed much even in light of an order from the People's Bank of China to commercial banks to adopt pro-active lending policies towards SMEs. To ease the credit crunch, which is a prevailing problem of SMEs, the commission will push the establishment of more credit guarantee funds to help SMEs get loans from commercial banks. Beijing was one of the nation's leading cities in establishing a 200 million yuan ($24 million) fund earlier this year. In the long-run, there will be special banks, serving SMEs, established. Officials and experts are also discussing how to introduce and develop venture capital in China to nourish high-tech SMEs. Fiscally, governments at all levels are supposed to conduct a review on all existing tax favors and clarify those for SMEs. If possible, local governments will elevate social security investment to enable SMEs to lay off redundant workers.

To clarify the qualification threshold for the funds and other proposed preferential policies, the State will revise the classification standards for SMEs. Such enterprises are classified according to standards which vary between different industries. With two or three comprehensive indexes such as assets or sales value, future classification will be made much easier. The preferential taxation and fiscal policies towards SMEs will also be streamlined after a national review. Policies encouraging technological support for SMEs are also being discussed. The dynamics of SMEs are drawing more and more attention as the country goes all out to pep the economy back up.
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China is drastically revising its Trademark Law to meet the needs of an economy in transition from central planning to rule by the market. The draft of the law has been finished and sent to concerned parties to solicit their opinions, it is reported. It will subsequently be submitted to the State Administration of Industry and Commerce (SAIC) for approval before it goes to the State Council and finally the National People's Congress for revision and approval. Some insiders disclose right now SAIC is making preliminary investigations and appraisal in respect of the revision of the Trademark Law. The Trademark Law currently in use went into effect in 1983 and was revised in 1993.

According to the draft, four provisions of the present law will be canceled, 15 changed and 40 more added. Registering for malicious purposes trademarks which are being used by others and have not been registered will be forbidden. The provision is aimed at protecting the rights of trademark users by preventing the registration of others' trademarks for the purpose of selling them at exorbitant prices back to the users.

The revision also intends to improve protection of intellectual property rights with more severe punitive measures. It gives an explicit definition of trademark infringement. In cases of infringement, damages should also cover a proper proportion of court costs and lawyer's fees. Fines for trademark infringement or counterfeit commodities will be 500 to 1,000 times the worth of a single counterfeit commodity. The present provisions stipulate that the fine should be one-half to five times the illegal income from trademark infringement or sales of counterfeit commodities. However, it has proved almost impossible to ascertain the actual illegal income for compensation purposes.

Moreover, as there is no specific stipulation concerning damages, in some cases they have hardly covered the lawyer's fees, which has dented enthusiasm for taking action to protect trademark rights. This is especially so in some foreign-related cases, insiders say. All this will be addressed in the revised law, into which special protection provisions for famous trademarks will also be written. Taking account of economic globalization, there will also be clear stipulations granting the same rights to internationally registered trademarks which have applied territorial extension as to domestically registered ones. Procedures for applying for international registration by a domestic holder of a registered trademark will also be made clear in the revised law. The revision will also allow anyone to apply for registration of a trademark and permit the co-ownership of a trademark. The important constructive elements of a trademark will be expanded. The revision is also expected to simplify trademark registration procedures, shorten the legal time limit and strengthen judicial supervision.
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At present there are 53 State level new and high-tech industrial development zones approved by the State Council. So far China has introduced the following preferential policies to aid the development of the new and high-tech enterprises.

In regard to taxes:

VATs and tariffs are exempted for importing instruments and equipment that are to be used directly for scientific research and experiment and business taxes will be exempted for incomes of scientific and research institutions from technology transfer;

In terms of income taxes:

1: A rate of 15% shall apply to a income taxes of new and high-tech enterprises set up in the new and high-tech industrial development zones approved by the State Council. Newly set up new and high-tech enterprises will be exempted from paying income taxes for two years, starting from the first year of operation.

2: Technology orientated incomes of scientific and research institutions and universities and colleges from technological transfer, technical training, consulting, servicing and contracting will be exempted from paying income taxes for the time being.

3: Enterprises and institutions will be exempted from paying income taxes if their annual net incomes from technology transfer and related consulting, servicing and training are less than RMB300,000.

4: Newly set up independent accounting enterprises or operational units of consultation (including technology), information, and technology servicing will be exempted from paying income taxes for the first year, starting from the date of operation.

In regard to financial affairs:

1. Encouraging enterprises to increase spending on technological development. Various costs incurred by the enterprises in developing new products, technologies and skills, including designing costs of new products, costs of formulating technological rules, costs of equipment adjustment, costs of experimenting with raw materials and semi-finished products, costs of purchasing technical books and information, salaries of research staff, depreciation cost of research equipment, intermediate experimental cost that has not been included in the national plans, other costs related with experiments with new products and technological researches, and cost incurred from entrusting other units to conduct scientific researches will not be limited by the percentage already set but instead can be included in the management cost.

2. Various costs incurred by enterprises in their research and development of new techniques and technologies should be increased annually and enterprises which have an increase of more than 10% of such costs in a year may offset their income taxes with 50% of the amount of the costs actually incurred.

3. Cost incurred by enterprises for purchasing key equipment and testing instruments for the purpose of experimenting new technologies and developing new products may be apportioned one time or in several times into the management cost if the unit price for the equipment or instrument purchased is less than RMBl00,000.

4. The depreciation of equipment used in the intermediate experiments conducted by enterprises to test and add related data, ascertain and complete the technology standards or solve the key technology problems of industrialized and commercialized production may be 30% to 50% faster on the basis of the original depreciation period, upon the approval from the fiscal and taxation authorities.

5. Related enterprises may, according to their plans and capacities for technology renovation, choose a shorter period of depreciation from those allowed by the State. The depreciation of equipment and machines in industries that are vital to the national economy, such as electronics production, ship building, and airplane manufacturing, may be faster.
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China will expand the scope of its reform and opening to maintain continued economic and social development. The nation would not change its policy, and it would be a wise decision for foreign businesses, especially multinational corporations, to increase their investment in China, State Councilor Wu Yi said on May 27 at the State-level Economic and Technological Development Zone's Foreign Investment Absorption Working Conference. Several days ago, China's Foreign Trade and Economic Cooperation Minister Shi Guangsheng said at the same conference that China will continue to protect the legitimate rights of foreign investors and maintain the stability and continuity of its foreign investment policies. The country will continue making arduous efforts to develop its trade and economic cooperation relationships with countries across the world.

These remarks came after NATO's bombing of the Chinese Embassy in Yugoslavia strained relationships between China and the West and triggered speculation about a shift in China's foreign trade and investment policies.

The Minister said the government would protect the interests of foreigners in China and those who have come to the country to engage in trade and economic undertakings. A series of international economic activities, such as the Beijing International High-Tech Industries Week, the Kunming Export Commodity Trade Fair '99 and the Fuzhou International Investment Promotion Fair, have been held as scheduled since the bombing, reflecting the Chinese Government's determination not to alter its course of economic opening-up. The Beijing International High-Tech Industries Week was especially successful in attracting business representatives, scholars, bankers and world-renowned experts from over 44 countries including the United States, Canada and Germany.

Meanwhile, preparations for future international economic activities are proceeding normally. The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) announced recently in Beijing that the Hong Kong '99 China Trade and Investment Fair as well as the Chinese Investment Policy Seminar would be held in Hong Kong from June 8 to 10. To launch such a trade and investment fair under the current circumstances indicates the Chinese Government's determination to stick to the reform and opening-up policy and continue attracting foreign investment.

After a 15-year development period, China's economic and technological development zones have expanded from coast to inland. Currently, there are 32 State-level economic and technological development zones across China. Statistics show that the 32 State-level development zones raked in 293.9 billion yuan ($35.4 billion) worth of industrial added-value in 1998, representing a 27.1% increase over a year earlier. By the end of 1998, these zones had clinched a total of $50.8 billion in pledged foreign investment and $28 billion in actual foreign capital input. So far, 113 of the world top 500 multinational corporations have launched investment projects in these economic and technological development zones. In contrast to the decline of exports amid the Asian financial turmoil, the export volume of these development zones still grew by 7.8% in 1998. The Minister urged the development zone management to build a more mature and attractive environment for foreign investors.

MOFTEC statistics show that in April, 1,409 new foreign-invested projects were approved, involving $2.7 billion in pledged capital and $2.9 billion in actual input. Cumulatively, a total of 329,637 foreign-funded ventures had been established in China by the end of April, with pledged investment hitting $583.9 billion and actual input reaching $277.7 billion.
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China has announced a list of commodities which are either banned or subject to import restriction effective on June 1. The first group of banned imports include used clothing, pornographic books and magazines, industrial waste containing harmful or radioactive materials, used automobiles and motorcycles and their major parts destined for dismantling or renovation, seeds, plants, fertilizers, feed, additives and antibiotics used for planting or breeding export products. Restricted imports include: plastic raw materials, including unprocessed polyester, polyester chips, polyester filament yarn and chemical stable fiber, cotton, cotton yarn, cotton gray cloth, rolled steel, including non-alloy rolled steel and stainless steel.

A recent notice issued jointly by the State Economic and Trade Commission, the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) and the General Administration of Customs (GAC) noted that classifying import materials for processing ventures is intended to ensure better management. MOFTEC Minister Shi Guangsheng recently said the nation is trying to encourage the processing sector to move toward a high-tech and high value-added orientation. Different types of commodities will be subject to different treatment. Firms approved by the GAC and under the supervision of in-house customs officers, as well as bonded factories with computer systems linked to local customs offices and no record of illegal activities; enterprises engaged in special industries such as aircraft and ship manufacturing will be under the bonded supervision of Chinese Customs and exempt from the guarantee money-machine account system.

All other ventures which process materials subject to import restrictions will be required to abide by the guarantee money-machine account system. Related ventures will also be required to deposit funds into a Chinese Customs account with the Bank of China. Related funds and accumulated interest will be refunded when a venture re-exports processed goods within a specified period of time.
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With abundant resources and an improved investment environment, Sichuan Province has a strong appeal to investors. In 1998, the province's GDP was 358 billion yuan ($45 billion), accounting for 4.5% of the national total and ranking 10th in the whole country. Contracted foreign capital rose 18% from 1997 to $1.6 billion. Nearly $1.1 billion of the total was utilized, 21.4% more than the previous year. The number of foreign-funded firms rose to 5,000, among which more than 200 are heavyweight players. The province's achievement was especially significant as the national rate of introducing foreign investment slowed and many provinces even introduced less foreign funds than in the previous year as the aftermath of the Asian financial crisis continued to bite. Li Dachang, vice-governor of Sichuan, said the province is paving the way for greater foreign capital inflows this year to help fulfill its target of 133 billion yuan ($16 billion) in fixed assets investment for 1999. Sichuan's overall fixed assets investment last year was 118.5 billion yuan ($14 billion), representing an increase of 25% from 1997 and ranking it first among the country's 10 western provinces.

But the share of foreign capital in overall fixed assets investment, including foreign direct investment and loans from foreign financial institutions, was only about 8%, in comparison to 50% in Guangdong Province. Great opportunities await, but they depend upon further improvements of the investment environment to tempt more foreign funds. A complete road network radiating from the capital city of Chengdu is expected to be established by the end of this year. By then highways will connect the capital city with all Sichuan's other major cities open to traffic. With the addition of the Chengdu Shuangliu Airport, now under expansion, the transportation capacity of the province will take a quantum leap.

Sichuan will not impose any new fees on foreign-funded enterprises in the coming two years. At the end of last year, the provincial government issued a list of fees for foreign-funded enterprises, empowering them to refuse any charges not on the list. By the end of this year, the government is expected to present a revised version of preferential policies for foreign firms to take account of changes in the economy.

For the sake of convenience, the province has listed 260 key projects for foreign companies to choose for cooperation. These projects fall into seven major categories where funds are most needed -- high-tech, restructuring of State enterprises, agricultural industrialization, tourism, building decoration, environmental protection and energy-intensive industries. More emphasis will be given to intermediate agencies including law offices, accounting firms, assets evaluation firms and project assessment firms in enlivening efforts to attract foreign capital. Two foreign consulting companies have opened their offices in Chengdu, one from the United States and the other from Sweden.

In order to further stimulate domestic demand, 60% of this year's fixed assets investment will be pumped into the province's infrastructure construction. The scope of these activities covers water conservancy facilities, forestry, telecommunications, transportation, environmental protection and State grain warehouses. High technologies, including electronic information, bio-technologies, pharmaceuticals and new materials together, represent another focus of this years fixed assets investment.
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Shanghai has taken new measures to improve its soft investment environment. From last September, the municipality has stopped examination and approval of foreign-funded trade enterprises in the Waigaoqiao Bonded Zone as before, and instead a new registration system has been put on pilot trial. Meanwhile, it will select 18 enterprises of rather good in performance to be sold to foreign investors as a new way of attracting foreign investment. Despite the impact of the Asian financial crisis, Shanghai still keeps a great momentum in attracting foreign investment.

Shanghai has finalized its economic development strategy for the next three years focusing on industry instead of services. The city hopes local industry will develop into a new phase by the year 2002 after eight years of restructuring. As one of the nation's key industrial bases, Shanghai began to reshape its economic strategy in the early 1990s with the focus placed on tertiary industry. Firm measures were taken to reduce the percentage of industry in the city's gross domestic product (GDP) and raise services' percentage. To reach the goal, the city started to restructure its industries by developing six pillar sectors-automobiles, telecommunications, steel, power station equipment, petrochemicals and home appliances. The six industries now occupy 48.2% of the city's total industrial output value.

In the following years, Shanghai initiated efforts to revamp textile and light industrial sectors. The city considered a plan for development of the high technology industry in 1996, that focused on information, computers, biotechnology, modern medicines and new materials. Now their output value makes up 16.5% of the city's total industry, far exceeding the 5% of the early 1990s. Thanks to these efforts, the city has been able to raise the stake of the tertiary industry in the gross domestic product from 30% in 1992 to 47.8% last year. The percentage indicates that the service industry has developed to a high level.

But the further growth of commerce, finance and securities demands an expansion of industry. The city is in need of new industrial projects that will promote the flow of bank loans and provide more jobs. A three-year plan has been hammered out after two years of investigation and consideration. Under the plan, industrial sales are expected to reach 700 billion yuan ($84.6 billion) by the end of next year. The output value of the six pillar industries and high-tech industries will represent 70% of the city's total industry by 2002.
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Zhoushan in East China's Zhejiang Province is inviting foreign investors to tap its rich marine resources. Consisting of 1,390 islands, the city of Zhoushan boasts sea territory of 20,800 square kilometers, representing 93% of the total area under its jurisdiction. According to its Ninth Five-Year Plan, the city, with a population of 984,700, is expected to realize a gross domestic product of 18.6 billion yuan ($2.2 billion) by the end of 2000, equaling an annual growth rate of 12% during the 1996-2000 period. Dubbed ¡°East China's Fish Granary," Zhoushan produces more than 500 varieties of fish, shrimp, shells and seaweeds. However, the city plans to reshuffle the fishing industrial structure by giving priority to pelagic fishing and sea breeding. The city plans to spend the following 12 years becoming an open and multi-functional port, a tourism city and a leading sea and ocean exploration base in China.

By the end of this century, the number of deep-sea fishing ships owned by the localities is expected to reach 200, with the annual catch approximating 80,000 tons. Meanwhile, seven aquatic breeding bases for marine creatures, including crabs, shrimp and algae, occupying 5,330 hectares in tidal areas and offshore, will be constructed to procure yearly products of 50,000 tons. Besides fishery, effort will be made to exploit the city's port advantages. The municipal government will extend generous support to the construction of a number of projects, including a 300,000 ton crude oil berth in Cezhi Island.

The city plans to promote the foreign-oriented economy of the city. In 1997, foreign trade volume reached $356 million, accounting for 33% of gross domestic product. To improve the local investment and business climate, the municipal government has issued a series of draft papers. The city will offer foreign investors tax reductions up to full remission. Various kinds of fees that used to be charged to foreign-funded firms will be canceled or deducted. The city also plans to give strong financial support to foreign trade companies. Manufacturing firms are being encouraged to set up foreign trade subsidiaries. The government will allocate funds to reward those enterprises achieving good export performance. Municipal government departments are also being urged to simplify procedures and improve efficiency while dealing with matters relating to foreign investment and trade. Many of the planned preferential policies and investment and trade regulations are unprecedented, it is reported.
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The following are a number of projects involving highways, computers, aluminum alloy, automobile parts, tires proposed recently by the cities of Nanning (the capital), Guilin and Wuzhou (major cities) of the Guangxi Autonomous Region for foreign cooperation.

1. Expressway linking Guilin and Wuzhou. Four-auto-tracks expressway of 280 km in length. Investment: $96.39 million. Form: Joint equity and others.

2. Manufacturing of computers. Annual production of 100, 000 sets of computers. Investment: $29.95 million. Form: Joint equity, coop, and others.

3. Aluminum processing plant of Nanning. Annual production of 110, 000 tons of new type aluminum alloys. Investment: $350.36 million. Form: Joint equity, coop.

4. Technology renovation of the rear axle of Wuling Autos (Annual production of 200,000 sets or rear axles). Investment: $36.14 million. Form: Joint equity.

5. Production of diel, weld jig (Introduction of 70 sets of key diel and 15 sets of jig for new type autos). Investment: $826.59 million. Form: Joint equity.

6. Expansion of the production line of cement of Guihong Building Materials Group, Guangxi (Daily production of 4,000 tons of chamotte cement). Investment: $57.53 million. Form: Joint equity, coop and others.

7. Production of radial tires (Annual production of 1.5 million semi-steel radial tires). Investment: $82 million. Form: Joint equity, coop, and others.

8. Production of rare earth aluminum lead (Annual production of 10,000 tons). Investment: $4.2 million. Form: Joint equity, coop.

9. Comprehensive exploration of buffalo milk of Nanning (Raising of 6,000 milk buffalo, annual production of 4,380 tons of unprocessed milk). Investment: $7.1 million. Form: Joint equity, coop.

10. Secondary road linking Wuzhou and Xindu (Secondary road of 93 km). Investment: $ 81 million. Form: Joint equity, coop, others.
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China's glasses industry is looking into the future with rose-tinted spectacles. As Chinese people's living standards improve and technology advances, glasses not only play an important role in correcting defective eyesight but are also functioning more as a fashion accessory. About 300 million Chinese need to wear glasses because of short- or long-sightedness. If they were to change their glasses every three years, annual demand would be 100 million pairs. Other kinds of glasses for special use, such as sunglasses, are also becoming more popular.

According to customs statistics, the sector's annual imports of $100 million focus on high-tech and complex products which domestic enterprises are unable to produce. Overseas enterprises are eyeing up the Chinese market. Four world-famous lens makers have invested in establishing factories in China. Many spectacle manufacturers from Hong Kong and Taiwan have invested in Dongguan, Guangdong Province, and Xiamen, Fujian Province. There are 316 glasses manufacturers nationwide. Overseas-funded enterprises account for 42%. China is becoming an increasingly important country for the production of glasses. According to industry statistics, the total sales of the sector reached more than 4 billion yuan ($500 million) in 1997.

Customs statistics indicated that exports had climbed over $300 million by the third quarter of last year, a 16% rise on a year-on-year basis. Glasses made in China are mainly exported to Southeast Asia, America and Europe. Sunglasses account for a major share, with annual exports totaling about $200 million. Although the industry has progressed well, some problems remain to be solved, including outdated equipment, small-scale production and unqualified employees. The glasses industry is labor-intensive and China has an advantage in the sector with rich resources of cheap labor. The industry needs to be supported by the government. The China Optometric and Optical Association (COOA), an intermediary organization for industrial coordination, is taking measures to promote the industry. An international glasses exhibition is held every year in the country, sponsored by the association. It aims to strengthen technical exchange and cooperation between domestic manufacturers and their overseas counterparts. Optometric and assembly equipment are the major items traded at the event, which has helped lead to a great improvement in processing technology.
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Wuhu City, located in the southeast part of Anhui Province, is a city directly under the jurisdiction of the Provincial Government. The city is situated on the joint of Yangtze and Qingyi rivers, bordering on the economic developed areas of Yangtze River Delta, in the middle between the Shanghai and Wuhan economic areas. It is described as an important city of pulling the country's economy development from coastal areas into the interior. As an important hub of water transport, Wuhu has the Yangtze River deep into 71 km of its territory and the Wuhu Port which is one of the five largest ports on Yangtze River, and a deep-water port on the Suojiang River. It is also the second important point of railway lines in east China and center of highway network in the south of Anhui Province, accommodated with five national railway lines and a dozen of trunk roads.

The infrastructure facilities of the city is improving with the new railway stations, bus stations, passenger vessel ferries, and airport recently built in the city. The third and fourth phase construction of a power plant in the city with two 12.5 KW generating units have been completed and started operation, and the first stage construction of Yangjiamen hydropower station and the Liminlu Water Plant has finished.

Wuhu was a trade port as early as in 1876. In the end of the 19th century, the city had become one of the four major rice supplier in China, the birthplace of modern industry in Anhui Province, and an economic center of Yangtze River areas. The Wuhu Port was approved by the National People's Congress in October 1991 to open to foreign ships, and the city was approved by the State Council in July 1992 to become an open city along the Yangtze River, enjoying preferential policies for coastal open cities. In 1996, the State Council approved Wuhu as an experimental city for optimizing capital structure. All these have made the city to maintain high-gear economic development for six years.

The comprehensive strength of the city has been reinforced and economic structure further improved. The pillar industries and high-tech industries have been taking shape in the city. The development of building material industry has been particularly prosperous. The city's production of shaped PVC materials has reached 100,000 tons a year, ranking first in the world; production of UPVC pipe, the third in the world; and that of paper-faced plaster plate and heavy carbonic acid calcium, leading the country in production.

The Wuhu Development Zone has become a key attraction to overseas investment with the start up of 715 projects, totally involving RMB13.65 billion of investment. The investors are from 143 companies of 17 countries and regions including some multinational companies such as VDO from Germany and Kawasaki Heavy Industries, Ltd from Japan, and big-name companies of China such as China First Automotive Group, Hailuo Group and MD Group. Output value of newly-launched industrial enterprises has quadrupled for three successive years, forming new systems of building materials, automotive parts, and electronics and information industries.
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China plans to increase the number of forest parks on its territory from the current 874 to about 2,000 by the year 2010 in a bid to let the touring-and-recreational parks become the pillar industry in the forestry sector. By then, the parks--covering 19 million hectares--will greatly contribute to people's environmental awareness while also protecting forests, wild animals and plants. Among the actual 874 forest, 292 have become national parks authorized by the former Forestry Ministry. The parks receive 50 million tourists annually.

Enlarging the park area is an inevitable trend amid China's green efforts to produce more trees and grasses. Nowadays, most forest parks have their own characteristics, and besides sightseeing spots and scientific surveying areas, they also bring economic benefits to forestry units. During the past decade, these parks injected over l billion yuan ($120 million) to modernize the scenic spots and build hotels and shops to cater visitors.

China's first national forest park--the Zhangjiajie National Forest Park in Hunan Province, was founded in September 1982. Between l992 and l997, forest parks across the country received 300 million visitors and brought 2 billion yuan ($241 million) of direct income. Indirect income reached over 10 billion yuan ($1.2 billion). Figures from the State Statistics Bureau showed that forest parks are spread over 31 provinces, municipalities and autonomous regions. East China's Anhui and Shandong are leading provinces with 23 and 22 parks respectively, while Hunan is the third with 21 parks. Forest agencies were urged to modernize their forest parks in order to attract tourists. Because China's forest tourism still lags far behind countries which have highly developed tourism industry such as the United States, France and Spain. Some forest parks do not use their resources well while some touring items are of a low quality.
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Sino-Swiss bilateral trade has expanded rapidly during recent years. According to the General Administration of Customs, the total trade volume of the two countries in 1998 came to $1.43 billion, and $196 million during the first two months of 1999, up 14.7% from the same period of 1998. Switzerland is China's second largest trading partner in Western Europe following the European Union. An increase in Swiss investment in China has accompanied the booming trade. In the past decade, many big Swiss companies, such as Roche, Ciba-Geigy and Nestle, have established pharmaceutical and food processing joint ventures in China. MOFTEC statistics indicate that 42 Swiss-invested projects were approved during 1998 involving contracted investments of $257 million. Utilization of Swiss capital increased by 3.7% to $223 million last year. By the end of last year, there are 369 Swiss-invested projects in China worth $1.63 billion in contractual investment and $862 million in actual capital inflows.
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The International Finance Corporation (IFC) signed an agreement with the Chengdu Chemical Co Ltd (CCCL) recently to launch a joint venture which will become China's largest high-purity potassium hydroxide producer. High-purity potassium hydroxide is a chemical product used in chemistry, light industry, medicine, fine chemistry, food preparation, cosmetics, batteries, ink and dye products. With the rapid expansion of these sectors, China had to import much high-purity potassium hydroxide. The joint venture, Chengdu Huarong Chemical Co Ltd, will sign agreements with IFC to receive $19.2 million in equity and debt financing after registration procedures are completed. The joint venture will operate a new production line of high-purity potassium hydroxide with an annual capacity of 10,000 tons. It will use IFC's financing to build an additional hydroxide in Pengzhou, a city under the jurisdiction of Chengdu.
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Britain-based Prudential Portfolio Managers Ventures (PPM Ventures) signed an agreement recently with Xi'an Seastar Modern Drinks Company (Xi'an Seastar) to invest 99.6 million yuan ($12 million) for the latter's business development. PPM Venture's investment will help Xi'an Seastar, a Shaanxi Province company, purchase new advanced equipment and utilities, including four new production lines and a bottling line. PPM Ventures is a subsidiary of the British insurance giant the Prudential Corporation. This is one of the major direct investment projects of PPM Ventures in China, which demonstrates the company's long-term commitment to the country. Its parent firm, Prudential Corporation, has been involved in China's economic development since 1994 with investments of 6 billion yuan ($723 million).
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