The State Council issued new rules on June 8 on commodities trading. The new rules include stipulations on the operation of commodities exchanges and brokerages,the basic principles of commodities trading, the supervision of the market and penalties.

China witnessed a boom of futures trading in the early 1990s after the government approved experimental business in 1990. But the risk of the market soon became unacceptable because of over speculation and manipulation, so the government tightened its control in 1993. The issue of the new rules marks the completion of years of market overhaul.
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China will revise its Patent Law to better protect intellectual property rights (IPR). Relevant special committees of the National People's Congress (NPC) are making preparations for amending the law, which was implemented in 1985. The revision of the law has been included in legislative plans of the Standing Committee of the Ninth NPC, it was reported on June 30. The State Intellectual Property Office (SIPO) is encouraged to summarize experience in the implementation of the patent law during past years and to study international conventions and protocols concerning intellectual property rights to make the law's revision more efficient.

The State will solicit specialists' opinions and suggestions before revising the law. SIPO will submit a revised draft to NPC's relevant committees as soon as possible, related sources said. The patent law was first revised in 1992. The current second revision is expected to meet demands arising from new scientific and technological developments and the country's rapid economic and social progress. Official sources suggested patent protection should be incorporated into a State technological innovation system, to further stimulate technology inventors' enthusiasm.
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The Chinese Government announced on July 20 that it will raise the tax rebate rates for a wide range of products for the overseas market. This is seen as a major step towards the expansion of exports, which has been on the decline under the impact of the Asian financial crisis. The Ministry of Finance and the State Administration of Taxation (SAT) jointly announced that the average tax rebate rate for export-oriented products has been raised by 2.95 percentage points, effective on July 1.

The export rebate rate for textile raw materials and products were raised to 15% while those for garments and accessories went up from 13% to 17%. For machinery and electronic products, the rebate rates were raised to 15%, with the exception of four categories of products that already enjoy tax rebate rates of 17%. For those products which had a tax rebate rate of only 11% to 13%, the tax rebate rate was raised to 15%, and products which had a tax rebate rate of 9% now enjoy a 13% rate.

Higher rebate rates reduce exporters' costs and hence increase their competitiveness on the international market. The country's sliding textile exports are expected to get a boost from the recent increase of tax rebate rates. Chinese textile exports, which grew at an average annual rate of 14% in the 1979-1997 period, have been sliding for 13 consecutive months since May 1998. The latest Chinese customs statistics indicate that textile exports during the first half of this year plunged by 21.1%, or over $4 billion, from a year ago to $16.86 billion. Garments and accessories, which make up around 70% of Chinese textile exports, nosedived by 26.7%. The decrease are mainly the result of a slack international market and stronger competition from Southeast Asian countries whose currencies have depreciated.
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In view of the easing of the long-term bottleneck in infrastructure due to a great progress of infrastructure construction in the country, the Department of the Basic Industry Development of the State Development Planning Commission has proposed some new policies on foreign investments in infrastructure.

Contracts on foreign-funded projects, which have been concluded, will continuously be effective. One example is power development. The country was severely in short of power supply in the previous years. To encourage foreign investment in the sector, measures have been adopted to set power prices in accordance with repayment of principal and payment of interest on loans and set the minimum amount of power to be purchased so as to ensure higher return for the capital. The Chinese government will keep its word and will continue to honor contracts and agreements. Failure to execute or realize contracts signed with FFEs or delay of due profit payment is not allowed to happen. Should problems of such kind appear, they should be solved right away. Related governments shall punish those enterprises that have violated contracts and damaged benefits of foreign businesses. The implementation of contracts should be monitored according to law.

As China had constructed a great number of power plants during the 6th and 7th Five-Year Plan periods, and these plants have been put into production one by one, great changes have taken place on the power market. At present, the country has generally achieved balance in the power supply and demand with saturation in some places. Last year 40% of the country witnessed power surplus. Some places only found power shortage in times of peak use. Some places relying on hydropower mainly had seasonal shortfalls.

In view of changes on the power market, related departments in the government have called on foreign investors attention that: as China market has been in a continuous development, risks of investment should be bore by both parties, no fixed return will be put in new contracts. However, the contracts which have been concluded should be continuously implemented. Such a new policy should be considered by foreign parties in making investment and adopt relevant measures including costs containment in order to continue to cooperate with the Chinese enterprises. In recent years, China has made great progress in the construction of infrastructural facilities but that still can't meet the demand on a long term basis. For example, at present, the per capita consumption of power in China is less than 900 kilowatt-hours, only accounting for 40% of world average. According to China's economic growth in the first decade of the coming century with full consideration of the factors of energy-saving and the adjustment of industrial structure, the country will still need to increase an annual installed capacity of more than 10 million kilowatts. In the coming years, China is expected to develop a number of key power projects.

In the case of transportation, China's highway density is not only far from that of economically-developed countries but also behind some developing countries. Its highways have not achieve scale efficiency and it is common that its central and western parts and the vast countryside are still short of bridges and roads. Before 1998, the density of the railway network in China was 6, while that in Germany, France, Britain, the United States, Japan, Russia and India reached 77, 56, 44, 41, 30, 17 and 11, respectively. In case of aviation, the capacity of airports in Beijing, Shanghai and Guangzhou has not yet met the demand of the development, and the aviation supervision and service information system need to be strengthened.

Based on the principle of expanding domestic demand and promoting national industrial growth, China will further encourage the use of home-made equipment. Taking power development as an example, home-made power generating units with a capacity of between 300,000 and 600,000 kw will be the first choice for use and home-made sub-critical and critical power generating units with an installed capacity of 300,000 kw to 600,000 kw as well as pumping station facilities are expected to gradually replace imported ones.
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China is starting to impose curbs on foreign tobacco companies' operations in the country. The move targets controls on the number of standing representative offices and the level of sales promotion activities of the foreign tobacco companies. According to a circular recently issued by the State Tobacco Monopoly Administration, the Ministry of Foreign Trade and Economic Cooperation and the State Administration for Industry and Commerce, foreign tobacco companies applying to increase their number of representative offices to more than two will have to meet either of the following two requirements:

1. Over $10 million in annual cigarette and cigar exports to China in the previous two years on average;

2. Technical cooperation with Chinese cigarette manufacturers with the permission of the State Tobacco Monopoly Administration.

But even for those privileged tobacco companies, the total number of representative offices will not be allowed to exceed 10. Few restrictions had been imposed on the number of representative offices in the past. As a result, some foreign tobacco businesses have established more than 30 such offices in China. The nation welcomes foreign tobacco companies to establish representative offices in China, but their number should not run out of control. Not all foreign tobacco businesses have expressed concern over the implementation of the new policy. For instance, Philip Morris, the producer of Marlboro cigarettes, has their representative offices definitely less than 10, therefore it has nothing to worry about. Apart from representative offices, foreign tobacco companies' business promotion activities are also expected to receive closer attention. And the reason is the same -- disorder in the market.
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After slogging through the bumpy first half of the year, China is determined to continue its strenuous efforts to prevent declines in exports and foreign investment inflows this year. Statistics from the General Administration of Customs showed that China's export volume landed at $83.01 billion in the first half of this year, representing a 4.6% decline from a year earlier. According to MOFTEC statistics, foreign investment inflows into China have also met frustrations in the January-June period, with newly pledged foreign investment plunging 19.87% to $19.39 billion and the actual input down 9.2% to land at $18.57 billion. MOFTEC attributed the backslide primarily to the new complicated changes taking place in the international economy as a result of the accelerated development of globalization. The flourishing of trade within NAFTA has also driven China's position on the United States' textile product supplier scoreboard from first in the past to third last year, behind Mexico and Canada. In addition, the price tumbling on the international primary goods market and the competition from the crisis-hit Asian economies have also hardened life for Chinese exporters.

Regarding the foreign investment decline, MOFTEC said the main reason has been the sweeping mergers and acquisitions between multinationals in recent years, which resulted in doubled capital injections into developed countries and shrinking investment inflows into developing countries. The pinched investment power of some Asian economies, deficiencies in the enforcement of foreign investment laws and regulations, and interference of political factors have also impeded China's foreign investment absorption.

But China still has many advantages, such as stable political and social environment, sustained growth of the national economy, huge market potential and the bottoming-out of the crisis-hit Asian economies. The national mid-year conference on foreign trade and economic cooperation was held from July 27-28 in Beijing. This was the first mid-year meeting of this kind ever held by the government, which gathered foreign trade and investment authorities from all provinces and major cities across China. At the meeting State Councilor Wu Yi said the Chinese Government has and will put forward more measures to boost exports and attract more foreign direct investment during the latter half of this year. She also noted that more fields will be opened to foreign investment. Policies and regulations detrimental to soliciting foreign direct investment will be scrapped.
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China has readjusted the structure of key energy and transportation infrastructure construction projects and pledged to pool more investment in these sectors. Official from the State Development Planning Commission said that despite the Asian financial crisis, infrastructure construction of the two sectors will still offer a steady and broad market for long-term investors. Noticeably, the Government reinforced investment in infrastructure facilities last year. Some 878.2 billion yuan was invested in coal, power, petroleum, transportation and telecommunications sectors, up 29% on the previous year.

The focus of readjustment will be put on the following:

1. Power industry. The general guideline is to optimize the development of thermal power, make great efforts to expand hydro-electric power, appropriately develop nuclear power, tap new power sources in line with local conditions, give priority to developing power grids, speed up the construction and upgrading of urban and rural power grids, and promote the connection of a national high-tension network.

2. Coal industry. Apart from an appropriate increase in aggregate output, the emphasis will be laid on readjusting the product mix and increasing the ratio of clean coal. Meanwhile, priority will be given to building mines in coal-deficient eastern China. The pace of mine construction in the western region will be slowed down. Much effort will be made to improve coal washing technology to promote the development of the coal seam gas industry.

3. Petroleum and natural gas. Petroleum and natural gas are always in short supply in China. To ease the situation, the petroleum sector will stick to the principle of stabilizing the output in the eastern area, developing oil resources in the west, attaching equal importance to petroleum and gas, and expanding the sector wider to the outside world. In the short term, apart from raising output, the sector will continue to intensify prospecting efforts in such areas as the East China Sea, South China Sea and the three basins in Xinjiang, to enhance exploitable reserves.

4. Liquefied natural gas (LNG). According to the general layout, while making great efforts to develop domestic petroleum and natural gas resources, China will actively participate in developing and using foreign resources and import appropriate amount of LNG as a supplement. Mainly developed in southeastern coastal areas, LNG in the near future will be used in coastal urban gas consumption and replacing liquefied petroleum gas.

5. Railways. First, focus will be placed on transforming existing trunk lines and raising the technological standard for sections with insufficient transportation capacity, so as to improve their equipment, raise train speeds, expand transportation capability and increase economic returns. Second, the sector will speed up the construction of ancillary facilities for newly completed trunk lines and improve the network structure to enable them to attain the designed capacity. Between 1999-2000, the sector will begin the construction of a group of projects that are of great importance to promote land resources development.

6. Highways. Continuous efforts will be made to speed up the construction of national highways. In addition to the three vertical lines and two horizontal lines; another two vertical and five horizontal expressways will be put into construction. Meanwhile, attention will be paid to enhancing the quality of highway networks and the construction of rural roads, in a bid to lay a good foundation for the sustained and steady development of the national economy.
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The industrial sector in Shandong Province achieved impressive progress in the first five months of the year. During the January-May period, the industrial added value reached 78.5 billion yuan ($9.48 billion), up 14% over the same period last year. The growth rate is among the highest in China. The economic efficiency of Shandong's industrial sector is also improving. According to statistics released by the National Bureau of Statistics, the province's industrial sector recorded 13 billion yuan ($1.57 billion) in pre-tax profits in the first quarter of this year, and 4.8 billion yuan ($0.58 billion) in profits, accounting for 25.7% of China's total profits from industry in this period. Provincial officials accredited the economic growth to increased market demand and improved sales value.

Statistics show that large and medium-sized enterprises are the driving force in Shandong's rapid growth. The value of the increased output from these enterprises during the first five months reached 48.5 billion yuan ($5.86 billion), up 11.94% from the same period the year before. These enterprises attributed their economic progress to their marketing efforts. Lately, more and more enterprises have started to regulate their production scale and structure according to market demand. Major enterprise groups such as Qingdao Haier Group, Jinan Iron and Steel, Yantai Orient Electronics and Hisense reported a hefty increase in profits in the first five months.

The increased investment in fixed assets -- such as infrastructure construction -- also helped promote Shandong's economy. Fixed assets investment there reached 236.4 billion yuan ($28.56 billion) during the first five months of this year, up 15% over the same period last year. This boosted the development of steel, glass, and cement industries. Meanwhile, foreign-funded enterprises, shaking off the influence of the Asian financial crisis, have become the fastest growing sector in Shandong's economy. According to statistics, during the first five months of this year, the output of these enterprises rose 24.9%.

The '99 Qingdao Foreign and Trade Fair and the Qingdao International Electronics and Home Appliance Fair concluded on July 19. The 7-day event attracted more than 10,000 business people, including 3,500 from overseas. During the fair, Shandong Province alone signed 667 agreements and contracts with overseas trade partners, involving $1.98 billion in foreign investment. At the same time, the province signed export contracts worth $0.9 billion and import deals worth $51 million. Foreign investment is sought for infrastructure projects, high-tech industry, machinery, light industry, textiles, electronics and aquatic products.
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Northeast China's Liaoning Province, one of the most important industrial hubs in the country, will achieve a faster development in economic growth in the second half of 1999. The local government implemented a package of stimulative measures in order to fulfill the 8% growth target for this year. According to the blueprint, the province will stress local investment, one of the key engines for economic growth. The province hopes to boost local consumption to offset a declining trend in economic growth. The measures include expansion into global markets for the province's products, an increase in export volume and plans to attract more foreign investments.

The reform and restructuring of State-owned enterprises (SOE) is expected to speed up. The province has set a target for its 60 biggest SOEs. The objective is to woo $1.2 billion in foreign funds and half of the funds are expected to be actually used in 1999, cutting SOEs' deficits by 50% this year. These enterprises, including Shenyang FAW-Jinbei Ltd Co, Dalian Iceberg Group, Anshan Steel Group, Fushun Petrochemicals Co and Benxi Steel (Group) Ltd Co, represent high industrial levels each in their own sector. They can also be considered as representatives of the type of problems SOEs must solve. They are industries related to electrical power, steel, automobile, petrochemicals, aviation, shipbuilding and machinery. Each of the 60 enterprises will use at least $10 million, and the value of all their contracts must add up to the anticipated $1.2 billion.

Liaonig's industrial sector represents about one-tenth of the nation's SOEs, and used to be China's heavy industry center. In addition, the province, embodying China's centrally planned economy typical of the 1950s, once greatly pushed ahead the nation's industries, including steel, metallurgy automobile manufacturing and petrochemicals. However, most of these industries are now coping with a market-driven economy, and many are led by serious debts towards bankruptcy. Until the end of 1998, 17 of the 60 top SOEs in Liaoning had never used foreign funds. Moreover, only 62 new projects saw the light using more than $10 million each.

Related sources said the province's 60 key State-owned enterprises will highlight international cooperation in the second half of the year. According to official statistics, the 60 key SOEs inked 20 projects with $237.6 million of contracted foreign investment in the first six months of 1999. Almost half of the SOEs have provided to foreign investors around 100 projects in such sectors as steel, metallurgy, medicine, energy, petrochemicals, building materials, automobile, machinery, garment, chemicals as well as computer and aviation.

During the first six months of 1999, Liaoning's gross domestic product (GDP) grew 6.6% over the same period last year to hit 152 billion yuan ($18.3 billion). The local gross output value grew 14.1%, reaching 104 billioin yuan ($12.5 billion). However, heavy industry achieved only a 0.6% expansion. Owing to various factors, most of the industrial enterprises in the province have sustained losses for years. In the January-June period of 1998, the sector's deficit was 4.6 billion yuan ($554.2 million). But the sector had only a deficit of 504 million yuan ($60.7 million) during the first half of this year. Because of the Asian financial crisis and intensified market competition, the province's export decreased 2.1% to $3.4 billion in the first half of 1999. On the other hand, import volume increased to $2.5 billion, 17.3% higher than the same period last year. The volume in contracted foreign investment dropped 33.4% to $1.8 billion.

The province will hold a series of economic exchange events as a move to further explore its industrial advantage and potential. The provincial government has recently worked out some measures to attract more foreign investment. To attract more overseas direct investment, Shenyang, the capital city of the province, will hold an auto industry exposition and international trade talks from September 2-6.
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Foreign capital and restructuring of State enterprises were the driving forces behind industrial development last year in Fuzhou, capital of Fujian. Despite the negative impact of the Asian financial crisis, Fuzhou's industry maintained a high growth momentum. Last year saw industrial output in Fuzhou reach 107.9 billion yuan ($13 billion), rising 22.8% compared with 1997. The figure represented 20% of the province's aggregate industrial output last year. Statistics from the local government indicate that from 1992 to 1998, more than 4,500 foreign-funded projects were approved, with contractual investment totaling $13 billion. By the end of last year, foreign capital injected into the sector topped $6.1 billion. Six major industries have been boosted by the formation of joint ventures -- electronics, machinery and metallurgy, chemical fiber and textiles, footwear, food processing, and plastic cement.

This year, priority will go to the city's pillar industries including electronics, machinery and light industry. A total of 76 projects focusing on industrial restructuring and development have been launched to seek foreign cooperation, with investment totaling more than 8 billion yuan ($960 million). Fuzhou has set the cross-century strategic goal of building a prosperous zone at the mouth of the Minjiang River on the west bank of the Taiwan Straits and a garden-like provincial capital city with a booming economy, trade and ports, and advancing the city's modernization drive into the next century in an all-round way. By the year 2000, the city's per-capita GNP is expected to be 32 times that of 1980. By the year 2010, the city's GNP and per-capita GNP will be eight times that of 1996.

Recently the city offered some projects for foreign cooperation and investment. Some major projects are as follows:

1. Luoyuan Development Zone, Shiqi 10,000-Ton Deepwater Wharf, and Huokou Hydropower Station (Package Program):

(1) Status: Shiqi 10,000-ton multi-purpose wharf with a designed annual handling capacity of 400,000 tons. Form: Joint venture or cooperative partnership. Investment: $23.5 million.

(2) Status: Luoyuan Huokou Hydropower Station, a dam-type power station with an installed capacity of 100,000 kw. Form: Joint venture or cooperative partnership. Investment: $91 million.

2. Special Wharf Engineering of Fuqing Jiangyin Iron and Steel Factory. Status: 100,000-ton class. Form: Joint venture or exclusive funding. Investment: $60 million.

3. 30,000-Ton Multi-Purpose Wharf of Songxia Port in Changle. Status: A 30,000-ton multi-purpose berth and auxiliary facilities. Form: Joint venture or cooperative partnership. Investment: $34.22 million.

4. Free Trade Zone Special Warehouse for Cross-Straits Direct Shipping Service (second phase). Status: Occupying an area of 1.33 hectares with a warehouse and auxiliary buildings. Form: Joint venture. Investment: $3.6 million.

5. Minhou Damuxi Hydropower Station. Status: Total reservoir storage capacity of 77.17 million cubic meters, a regulatory storage capacity of 51.11 million cubic meters and an annual power generation of 185 million kwh. Form: Joint venture or cooperative partnership. Investment: $80.71 million.

6. Fuqing No.3 Water Works. Status: Daily supply of 200,000 tons of running water. Form: Joint venture or cooperative partnership. Investment: $18.8 million.

7. Fuqing West District Sewage Treatment Plant. Status: Constructed by two phases, with a daily treatment capacity of 100,000 tons of sewage. Form: Exclusive funding or using foreign loans. Investment: $25 million.

8. Changle Waiwenwu Reclamation Engineering. Status: Enclosing an area of 1,266.7 hectares for aquatics breeding, farming and development of other industrial and commercial projects. Form: Joint venture or cooperative partnership.Investment:$20.06 million.

9. Luoyuan Baishui Reclamation Engineering. Status: Reclaiming an area of 8,000 hectares. Form: Joint venture, cooperative partnership or exclusive funding. Investment: $10.24 million.

10. Minhou Jingxi Ecological Agricultural Comprehensive Development Experiment Farm. Status: 200 hectares for ecological agricultural comprehensive development, 133.3 hectares for fruit trees, 500 mu for fish farming and 33.3 hectares for raising rare animals and domestic animals. Form: Joint venture, cooperative partnership or exclusive funding. Investment: $6 million.

11. Changle Agriculture Comprehensive Development Experiment Farm. Status: 1,600 mu for longan (developed by three phases), 13.3 hectares for fish ponds and raising 10,000 egg-laying ducks. Form: Joint venture or cooperative partnership. Investment: $27 million.

12. Longxiang Island Agriculture Sight-Seeing Garden. Status: Developing 66.7 hectares of land and 20 hectares of water area. Form: Joint venture, cooperative partnership or exclusive funding. Investment: $20 million.

13. Fuzhou Beifeng Agricultural Science and Technology Sight-Seeing Garden. Status: A tract of 200 hectares to be developed for a sight-seeing area based on farming, mountain villas and gardens. Form: Joint venture, cooperative partnership or exclusive funding. Investment: $50 million.

14. Minqing 666.6 hectares Pollution-Free Vegetable Base. Status: To be completed in three years, with an annual output of more than 50,000 tons of pollution-free vegetables. Form: Joint venture. Investment: $1.81 million.

15. Jin'an Vegetable Base. Status: A 100-hectares tract to be developed in Rixi Township, for growing vegetables with an annual output of 12,000 tons. Form: Joint venture or cooperative partnership. Investment: $2 million.

16. Langqi Vegetable Processing Factory. Status: Constructing a factory building of 2,000 square meters and importing a fully-automatic vegetable cleaning and pasteurizing line and other advanced equipment. Form: Joint venture, cooperative partnership or exclusive funding. Investment: $1.52 million.

17. Fuqing Taiyuan Baiguo Orchard.Status: Building a 66.6-hectare base for orchid. Form: Exclusive funding. Investment: $2 million.

18. Fuzhou Famous Flower Planting. Status: A 20-hectare tract for planting various kinds of famous flowers, of which 12 hectares for chrysanthemum, 3.3 hectares for roses, 3.3 hectares for gladiolus and 1.3 hectares for other varieties, with an annual output value of $1.65 million and yearly profits of $550,000. Form: Joint venture. Investment: $1.15 million. (to be continued)
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International natural gas producers are increasing investment in China in light of its tremendous potential market for the clean energy needed to improve the country's deteriorating air quality. Chevron Overseas Petroleum Inc, one of the world's leading petroleum and natural gas companies, announced at the '99 China Petroleum Conference held last May in Beijing that it had plans to invest $60 million this year in China. Since 1979, Chevron has invested some $400 million in onshore and offshore oil exploration and development in China. This year's investment would go to exploration and production in Bohai Bay, the South China Sea and Shengli Basin. Long-term stability is foreseeable in China and the Chinese market for natural gas is huge with the government taking measures to improve the environment, according to company.

Air pollution is becoming an increasingly serious problem in China, posing a threat to the country's long-term sustainable growth. Experts say that natural gas can help alleviate this problem. It is an energy source which generates only 2.5% of the pollution created by petroleum and 0.125% of coal pollution. Demand for natural gas in China is projected to hit 95 billion cubic meters in 2010. Demand in Jiangsu, Zhejiang and Shanghai alone is predicted to rise to 30 billion cubic meters by 2015.

Natural gas currently accounts for only 1.9% of the country's total energy consumption, compared to 75% for coal. Natural gas could also help developing countries like China to reduce 40% of the energy costs in power generation from coal, it is said. China has very rich natural gas resources, but most of them are located in inland provinces such as Sichuan and Gansu. The cost of construction of pipelines linking the resources and major markets in the densely populated coastal areas has long been a formidable obstacle to the development of these gas resources, industry experts say.
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The traditional industrial city of Liuzhou in Southwest China's Guangxi Zhuang Autonomous Region plans to enlarge its investment in science and technology in a bid to accelerate its economic development. The city had already targeted the development of high- and new-tech electronic and mechanical projects with strong competitive potential this year. Figures from the local statistics bureau indicate that 1.04 billion yuan ($125 million) was invested in technological upgrading last year, up 21.56% over 1997, and that new high-tech turnover reached 4.36 billion yuan ($525 million) in 1998. Only by enhancing the process of technological innovation and product upgrading could the city promote its economic growth. The city had set a goal of developing 100 new products annually from this year.

The city is also expected to woo more foreign investment for economic and technological cooperation. Liuzhou implemented 151 foreign-invested projects and attracted a total of 136 million yuan ($16.3 million) in foreign capital in 1998. These projects have flowered in various areas including infrastructure, environmental protection, agriculture and tourism. The city has invited professional and academic experts from the United States, Germany, Sweden, Japan and Russia to solve its problems in the process of technological and equipment upgrading. It is estimated that 18 enterprises in Liuzhou have gained the IS09000, IS09001 and IS09002 certificates issued by the International Standardization Organization or its authorized organs.

It is estimated that the aggregate income of enterprises in the Liuzhou High- and New Tech Development Zone in 1998 reached 1.82 billion yuan ($219 million), double that in 1997. The influx of foreign capital has not only helped enterprises relieve their shortage of funds but also promoted the application of advanced technology and management.
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China's container shipping industry has developed fast over the past two decades and enjoyed a 30% annual growth since the early 1990s. The nation now has more than 150 shipping companies dealing with container transport. They are equipped with more than 600 ships and 300,000 TEU (ton equivalent unit) containers. There are some 70 berths in the country devoted to container business, with a combined annual handling capacity amounting to more than 12 million TEUs.

China's ports are now open to more than 140 sea routes with overseas counterparts. Shanghai and Shenzhen ports are ranked among the world's leading ports. In 1998, the country's ports handled 13 million TEU containers, a 21% rise on a yearly basis. As many as 280,000 TEU containers were shipped across the Taiwan Straits last year. Industrial insiders said the country's fast economic growth has paved the way for the development of the shipping industry. The container sector owed its success partly to the growth of manufactured goods which account for 40% of exports. By the turn of the century, China is to build 100 deep-water berths of 10,000-dead weight ton and will add 200 million tons to its ports' handling capacity. The government will also further improve the laws on container shipping, increase the use of high technology in the sector and open the market wider for overseas container transporters.
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Xinhua Financial Corp announced on June 21 its plan to establish a joint venture with Bush Corp of the United States to offer financial consulting services to foreign investors and Chinese enterprises. The 50-50 joint venture, Bush Xinhua Financial Consulting Services, will identify financially promising Chinese firms seeking foreign investment. These firms will then be screened and introduced to foreign institutional and individual investors who can assist the firms with direct investment or with an IPO (initial public offering). The firms targeted by the joint venture's financial consulting services will be those small- and medium- sized businesses involved in the high-tech and other emerging sectors. Bush Corp, headquartered in Hawaii, foresees great potential for these firms which enjoy strong support from the Chinese Government. According to the Chinese partner, an initial survey shows that the volume of committed investment by foreign institutional and individual investors for Chinese small and medium firms in the high-tech and emerging industries should hit $3 billion in the coming three years.
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The French company Gemplus began producing SIM (subscriber identity modul) card on June 18 in its Tianjin joint venture, in a bid to satisfy China's robust mobile communication market. The SIM card is the ¡°brain" of the mobile phone and handles information management and various processing functions. Gemplus set up SIM card production lines in its Tianjin joint venture which was formed in partnership with the Tianjin Telephone Equipment Factory in June 1997. The joint venture has produced over 50 million telephone IC (integrated circuit) cards for the Chinese market, taking more than a third of the market share.
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An agreement has recently been signed by representatives of a union of Adtranz and Siemens with China's Ministry of Railway and Transportation Machinery Import and Export Corporation for jointly undertaking an electrification project for electrifying 950-km long railway linking Harbin and Dalian under a contractual value of some 350 million Deutsche marks, the largest railway electrification project in the world ever. Adtranz and Siemens each contribute 55% and 45% of the investment respectively from a mixed credit given by the Germany Reconstruction Bank. Adtranz will be mainly responsible for the project and the union would provide a 2,800-km-long contact network system, 17 tractive electricity transformation stations, and a complete set of electrification devices, including a long distance control and SCADA system. The electrification technology can guarantee that the cost for the whole cycle of production will be reduced.
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