The State Development Planning Commission (SDPC) issued on August 1 a regulation on administrative punishments for price violations as part of the country¬šs efforts to guarantee a fair and competitive market order and a healthy economic development. The overall price indexes of the domestic market have been declining for 21 successive months with sluggish demand. SDPC officials expressed concern with market irregularities, including dumping, price fraud, price monopolization, price discrimination, price increases, and other price_related violations. The length and breadth of the price decline have added burdens to businesses, reduced investors¬š confidence and have led to dumping and vicious competition, which jeopardize consumers¬š rights.

The new measures will play a positive role in preventing price irregularities, maintaining a good market order for fair and open competition, for improving the consumption and investment environment, expanding domestic demand, and promoting economic development. Based on the Price Law, the 20_article regulation further defines legal responsibilities for price violations, and spells out in detail concrete punitive measures to be taken against businesses that do not follow government pricing policies. The regulation highlights the importance of protecting the legal rights and interests of both consumers and businesses, and requires Price Law enforcement officials to strictly abide by the law and regulations.

Law enforcement officials who disclose State secrets or businesses¬š commercial secrets, abuse their power or neglect their duties, will be punished. The regulation provides law enforcement officials with a legal basis for rectifying price irregularities. They have, for a long time, been plagued by difficulties in carrying out their inspections, administering punishments and collecting fines. The regulation specifies fines and punishments for various kinds of price violations, and lists punitive measures for unauthorized fees.
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China plans to further open its accountancy market and welcomes cooperation with international firms. Overseas firms are encouraged to participate in the country¬šs certified public accountants¬š qualification tests, and qualified overseas accountants will be allowed to practice in China. Foreign accountancy firms are welcome to establish either cooperative or membership firms, and related companies can set up representative offices or conduct temporary business.

The country is expected to make major revisions of the existing Accounting Law, according to the ”°Revision Draft of Accounting Law" delivered by the State Council to the Standing Committee of the National People¬šs Congress for examination on June 22. Six articles will be retained, 16 articles will be revised and 24 articles added and 8 canceled in the new law.

China is now facing with distorted information and chaotic operation in accounting. A sample survey over 839,000 units conducted by the Ministry of Finance in 1996 showed that 16.3£„ of them had been found of distorted accounting information, 38.9£„, false report of profit increase and 22.8£„ of the non_State sector surveyed were discovered with the same problem. Many of the units surveyed lack accounting books or disorder in accounting work, no accounting record, documents and statements. Some 16.2£„ of the surveyed had their basic accounting work in a mess, of which 52.1£„ were privately_owned, township and self_employed firms. Such situation has not yet changed fundamentally. Such account booking has come to the stock market.

Sources from the Ministry of Finance analyzed that the main cause of the phenomena is due to imperfect laws and regulations and weak binding force mainly reflected in weakness in examination, prevention, and penalty for false accounts and accountant qualification; unconscientious of persons in charge on financial disorder and distorted accounting work and difficulties in supervision. In view of the situation, it is, therefore, necessary to make revisions of the Accounting Law so as to strengthen related responsibilities of persons in charge and stress account making in accordance with the law. The new revisions make specific stipulations for enterprises making false account, work out principles for internal supervision over accounting and reinforce the stipulations concerning accountant registration and auditing system. The revisions also make clear definition of law executing status of the Ministry of Finance, eliminate the unfavorable factors produced by multihead control and supervision, practice responsibility system in law enforcement, strengthen qualification examination for engaging in accounting work and professional moral education, reinforce legal responsibility and strengthen punishment and criminal investigations. The government has issued 9 codes for enterprise accounting, and 33 more will be issued by the year 2003. Officials from the Ministry of Finance noted that the revisions make fraudulent accounting a punishable crime and the country is taking a positive attitude towards bringing its accounting system closer to international practices.
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China¬šs tax authorities reiterated that local governments should stop the unacceptable practice of reimbursing foreign_invested enterprises from their fiscal budgets. The various tax breaks offered by local governments, in an attempt to woo foreign investors, have caused chaos in the investment system and the country¬šs tax policies. Lu Yun, director of the tax policy division of the Foreign Tax Department under the State Administration of Taxation (SAT), said recently such practices have confused foreign investors regarding what the country¬šs preferential tax policies are and this practice must be stopped. Some local governments have drafted various regulations that give extra income tax reductions to foreign_funded businesses in order to boost the waning inflow of foreign capital.

When the SAT urged tax officials at all levels not to carry out such illegal measures, some local authorities turned to their local fiscal budgets to refund foreign_invested businesses to live up to their promised tax breaks after tax revenues were collected by tax officials in accordance with the laws. It¬šs illegal for local governments to amend tax law. And such regulations are not guaranteed since they are not stipulated by the law and can be changed on short notice by the local governments which made them.

Local authorities should not overestimate the importance of tax breaks in attracting foreign investment since other factors like the market, availability of raw materials and infrastructure play a more important role when foreign investors consider the feasibility of projects. Moreover, analysts say tax incentives are only attractive to investors from countries with which China has signed special bilateral agreements stipulating that tax deductions in China are recognized in the firms¬š home country and are not levied again. Since 1980, China has made an array of favorable tax policies to encourage foreign_invested manufacturing businesses in the country¬šs open_up areas, like special economic zones and coastal port cities, and foreign investors are actually enjoying better treatment in general than domestic enterprises. The current preferential tax policies for foreign_funded enterprises will not be changed in the foreseeable future.
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More high_quality mainland companies are expected to be listed on overseas stock markets. The China Securities Regulatory Commission (CSRC) released on July 21 new requirements for firms planning to be traded on the main boards of overseas stock markets. Enterprises, whether they be State_owned, collectively_owned or in other forms of ownership, can apply to the CSRC for overseas listing as long as they have been transformed into joint stock companies and meet the requirements. Securities observers hailed the move, calling it a key step in improving the quality of mainland firms traded on overseas markets.

In the past, most firms listed overseas are State_owned large and medium_sized enterprises and the CSRC, China¬šs securities watchdog, examined their qualifications by groups. The CSRC also set the issue size and number of overseas listings. Under the new practice, there is now a quota on overseas listings. If one is ready, then it will be pushed out. The new practice means private enterprises also have access to overseas stock markets. Foreign investors will be happy to see more high quality firms to become available.

Under the new criteria, each overseas listing applicant must have net assets of no less than 400 million yuan (”ē48.2 million), and a minimum after_tax profit in the past year of 60 million yuan (”ē7.2 million). Funds raised from the initial public offering should not be lower than ”ē50 million and use of the proceeds should be in line with State industrial policies, foreign fund utilization policies and related regulations on fixed assets investment. In addition, the companies must have reliable foreign exchange sources to distribute dividends after going public. The CSRC also requires the applicants to have sound internal management systems and stable management. So far, more than 50 mainland companies are traded in overseas stock markets, all on the main boards.
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China¬šs first ”°Regulation Governing Feed and Feed Additives" will guide supervision of the country¬šs fodder industry and ensure the safety of animal feed and animal products, Vice_Minister of Agriculture Qi Jingfa said recently. The regulation, approved by Premier Zhu Rongji on May 29, resulted from an in_depth study of the country¬šs fodder practices which included consideration of advanced techniques from abroad. It could prevent incidents such as Belgium¬šs dioxin contamination case from occurring in China.

As the world¬šs second_largest fodder producer, China turned out 55 million tons of blended feed last year, with an output value of 130 billion yuan (”ē15.66 billion), ministry statistics indicated. However, a lack of forceful regulations has resulted in a series of problems in the fodder industry. Fake and shoddy feeds and additives have caused serious economic losses to farmers, and lax import inspections have allowed some bad feed and additives to enter this country from abroad. The newly_promulgated regulation says any new domestic feed or additives should be registered with, and tested by, agricultural departments or designated agencies. According to the regulation, a national feed appraisal committee will inspect feed or additive samples. Cao Kangtai, vice_director of the Legislative Affairs Office under the State Council, has called on local feed administrative departments to strictly implement the Feed and Feed Additives Management Provisions.
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The Ministry of Foreign Trade and Economic Cooperation and the Ministry of Science and Technology have decided to work together to implement a package designed to promote China¬šs exports of high_tech products. This was announced in a joint circular issued recently by the two ministries entitled ­·Boosting exports through science and technology". Boost exports through science and technology will help China become a larger and more powerful exporter, the circular notes.

Five high_tech areas__information technology, biomedicine, high value_added new materials, consumer electronic products, and family appliances have been designated this year as the first group of products to enjoy government preferential treatment and other incentives. The package also includes preferential policies to cultivate high_tech product development zones, cities and companies, and set up a nationwide high_tech export information service network, as well as the launch of annual high_tech fairs, according to the circular. In addition, the two ministries will establish special coordinating bodies to implement the package.
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China is accelerating the development of energy resources in a bid to meet the demand for energy in the coming century and guarantee sustainable economic development. A State Development Planning Commission official in charge of energy development said China will pay equal attention to developing energy resources and to saving energy in the 21st century. Energy development in the next century will be based on coal production and focused on power generation. The development of petroleum, natural gas, nuclear power, as well as other new and renewable energy resources will be accelerated. China will launch a series of strategic drives in the next century. In one of the drives, the coal sector will be shifted westwards and great efforts will be made to develop the Shenfu and Dongsheng coalfields, in Northwest China¬šs Shaanxi Province, and ease bottlenecks in coal transportation.

In the power sector, China will accelerate construction of hydroelectric power stations along major rivers and coal_firing power plants near coal mines. The petroleum industry will make oil and gas exploitation in western China and in offshore areas a priority. Early next century, China¬šs major coal bases will be in Shanxi, Shaanxi, Heilongjiang and Guizhou provinces and western Inner Mongolia. Its major water_power production sites will be on the upper reaches of the Yellow River and the middle and lower reaches of the Yangtze River. Its major oil supplier will be in Daqing in China¬šs northeast province of Heilongjiang and Shengli in East China¬šs province of Shandong.

China will continue to develop conventional energy resources, while paying close attention to the development of geothermal, wind, solar and tidal energy in order to optimize the structure of energy production. Power industry analysts note China will achieve balanced supply and demand for energy by early next century. The current net export volume of 30 million tons of coal will be increased in the 21st century. However, no big increases are expected for imported oil. Estimates indicate the total consumption of the country¬šs nonrenewable energy resources will equal 1.38 billion tons of standard coal in early next century, with coal output rising to 1.45 billion tons. China¬šs annual oil production will hit 150 million tons and gas production will reach 25 billion cubic meters. In addition, the country¬šs major power grids will be linked nationwide.

China is accelerating development of clean coal gas and geothermal resources to improve its energy resource consumption structure and reduce air pollution. The nation has abundant coal gas resources, with an estimated 3.5 billion cubic meters of recoverable deposits in northern, northeastern and southern China, indicates the State Development Planning Commission (SDPC). China has developed more than 50 coal gas projects, including a 650,000_cubic_meter gas storage facility and coal gas pipeline stretching 620 km. The country¬šs annual coal gas usage tops 400 million cubic meters.

The Chinese Government has decided to promote clean coal and gas development. Preferential loans will be available for key coal gas projects. The government is considering tapping southwestern geothermal energy resources and building medium_sized geothermal power stations in Tibet, Yunnan and Sichuan. China has 3,000 hot springs, including 2,200 springs with temperatures higher than 25”ę.
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Shanghai¬šs economy developed faster than expected between January and June with the growth rate of its gross domestic product (GDP) reaching 9.6£„, at a value of 181.4 billion yuan (”ē21.8 billion). The growth rate is 0.6 percentage points higher than this year¬šs target of 9£„ and 2£„ higher than the country¬šs average level. The city¬šs economy is showing an increasing trend month by month. The progress should be attributed to the fast development of the manufacturing industry and tertiary industries.

Of the GDP growth rate, industry accounted for 4.2£„ and services made up 5.4£„. Industry generated products worth 300.4 billion yuan (”ē36.2 billion), up 11.4£„ compared with the same period last year. Overseas_funded ventures saw a quick development at a growth rate of 13.7£„ in output value, while State_owned enterprises witnessed an 11.4 increase rate. But investment in fixed assets projects decreased by 4.3£„ over the same period last year slowing down to 48.8 billion yuan (”ē5.9 billion) due to corresponding reductions in funds for property projects. Investment in real estate projects amounted to 13.3 billion yuan (”ē1.6 billion), a drop of 14.9£„.

The city exported goods worth ”ē8.13 billion, an increase of 17.2£„ over the same period of last year. High_tech and high_value_added products kept the lion¬šs share of the exports. Exports of foreign_invested enterprises rose by 32£„. The city has enlarged some new markets for exports. Exports to Europe and the United States grew by 8.6£„ and 26.5£„, while goods sold to Asia increased by 18.6£„. Exports from overseas_funded enterprises, including foreign_owned and joint ventures, have become the number one contributor to the city¬šs export growth. The first half of the year witnessed an export volume of ”ē4.637 billion from these enterprises, up 33.95£„. The figure also accounted for 57.7£„ of the city¬šs total export volume during the same period. Exports from these ventures have experienced an upward ride in the last two years with an annual growth rate hitting 21.4£„. Foreign funded ventures have become the major driving force in beefing up the city¬šs exports. The expansion should be credited to an increasing number of foreign ventures in the city.

A total of 1,490 projects invested by foreign businesses were approved by the city last year with a contracted investment of ”ē5.85 billion, of which ”ē3.64 billion was put into use. Fifty_nine of the leading global multinational enterprises have put investment into Shanghai, A sound mix of products also contributes to the export growth in the ventures. The ventures witnessed a surge of 67£„ in the exports of machinery and electronic products, and a rise of 50£„ in those of high_tech and high value_added products last year. Competitive products include computers, precision machinery and electronics, seaport machinery, semi_conductors, light and magnet electronics.

Some 60£„ of last year¬šs actual_used foreign capital was channeled into manufacturing projects. Meanwhile, the ventures¬š engagement in promoting the processing trade helped to diversify their trade channels and boosted the export growth. The ventures raked in an export volume of ”ē6.77 billion in processing trade last year. The ventures are backed up by their parent companies to boost their exports. Particularly those ventures set up by big_name global firms can broaden their international markets by taking advantage of the comprehensive and advanced marketing network and capital offered by the giants.

Shanghai continues to charm the global business community in defiance of the financial turmoil that has plagued all of Asia. Foreign investors have kept faith in the city¬šs economic growth and have continued to pump more money into the city in the first half of this year. The city has secured reinvestment of ”ē790 million in contracted capital, a year_on_year increase of 5.3£„, for 214 projects during the first half of this year.
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Thanks to the implementation of the country¬šs strategy of accelerating the development of the central and western regions, Guizhou¬šs economy and trade have witnessed rapid growth. Guizhou, located in Southwest China, is an inland province with beautiful mountains, pleasant climate, abundant resources, hardworking people and great potential for development. Guizhou has rich natural resources, which provide a good foundation for the development of many industries in the province. Among the 110 minerals which have been discovered in the province, coal, phosphorus, mercury, aluminum, antimony, man ganese, gold, barite and pyrite are distributed with large scale and good quality, and they are easily mined. The post and telecommunications system of Guizhou is currently fast and convenient for the people to communicate and exchange information with those domestic and abroad.

The growth of industry in the province is based upon the improving infrastructure, including post, telecommunications and transportation. With the capital of Guiyang as a center, there are four existing trunk railways and the high_grade Guiyang_Huangguoshu Highway. The new Guiyang International Airport, Nanning_Kunming Railway and high_grade Guiyang_Zunyi Highway were completed last year and are operating. The raw material industry accounts for a large percentage of the total industry in the province, which is focused on ferrous and non_ferrous metallurgy as well as chemical industry. Guizhou is also the country¬šs important production base of raw materials such as electrolytic aluminum, mercury, titanium, pig_iron and antimony.

In addition, the military industry has been combined with the civil industry to help shape the machinery and electronic industry. With the assistance of a big contingent of scientists and engineers, Guizhou has formed three large bases of industry __ aerospace, aviation and electronics. A group of key enterprises engaged in automotive and spare parts, abrasive materials, grinding tools and industrial bearings in the province are large_scaled and well_equipped. The light, textile and food industries are focused on cigarette, liquor and textile products in Guizhou, and the province has benefited from pillar enterprises such as the China Kweichow Moutai Distillery (Group) Co Ltd. Guizhou is a developing treasure land with a bright future and good opportunities for development in the next century.

The province, which is known for its rich scenic spots, has decided to attract more visitors to develop its tourism industry. The provincial government is taking measures to publicize more fantastic sceneries besides the world_famous Huangguoshu waterfalls. Guizhou will launch some tourism and investment seminars in a bid to publicize and solicit funds to develop tourism_related projects. Eco_tourism is a trend that emerged only 10 years ago in order to promote the three ”°Ns"__Nature, Nostalgia and Nirvana. The philosophy of the eco_tour is to protect natural scenic spots. There are many other attractions such as the Fanjing Mountain Nature Reserve in Jiangkou, a paradise of dovetrees and golden monkeys. All these sites attract nature lovers both at home and abroad.
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Xi¬šan, capital of Shaanxi Province, is steamed up to ride the tide of the Chinese Government¬šs strategic decision to accelerate the economic development of the central and west regions. Xi¬šan has already established a special department to study the issues of quickening the economic development in the northwest region of the country. To better prepare for investments from abroad and the economically advanced areas of the country, the Xi¬šan municipal government has sped up construction of its infrastructural facilities and launched 71 key projects to stimulate consumption and push local economic growth. The measures are expected to fuel up demand and as a result, create more opportunities for investment and cooperation from foreign and domestic firms. The city is also drafting policies concerning tax treatment and investment to create more favorable conditions for foreign investment. Relevant ministries and commissions of the central government are studying the measures and policies on spurring economic growth in Northwest China and they are expected to be released soon.

So far, Xi¬šan has already hammered out a set of measures to obtain more foreign investment for the city. The city¬šs think tank is expected to have a time table to offer foreign firms market access to local service industries such as finance and insurance. The city is now establishing a network of institutions responsible for solving the investors¬š complaints. A vice_mayor in Xi¬šan is ready to serve those in the network for the sake of the investors. Offering efficient service and institutionalized solution is on top of the agenda of the local government to make the investment environment amicable to foreign entrepreneurs. Upcoming infrastructural activities in Northwest China will also convert the region, with a sluggish economic growth, into a potential market for ambitious international investors. The city¬šs pillar industries of tourism and technology will also generate a great deal of opportunities for developing foreign trade. By the end of this year, 30£„ of the municipal government¬šs financial charges for developing science and technology will be used to enlarge export volume of the high_tech products.

Xi¬šan will hold its eighth investment and trade fair on September 12_17 this year. The city will offer potential investors 204 wellselected projects involving a total investment of ”ē2.85 billion. Of all the projects, 40£„ are related to high technology. This is because Xi¬šan ranks third after Beijing and Shanghai in the Chinese mainland in terms of its comprehensive technology strength. Xi¬šan has 40 colleges and universities, 672 large and medium_sized scientific research institutes and 370,000 technicians and specialized personnel. Partly thanks to the technological advantages of the city, foreign investors have a strong interest in investing there. By June this year, the number of foreign_invested projects reached nearly 2,000.
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19. Fuqing Breeding Pig Farm. Status: Annually raising 10,000 breeding pigs and 30,000 pork pigs. Form: Joint venture. Investment: ”ē3.78 million.

20. Fuzhou Special Aquatic Products Farm. Status: Building 13.3 hectares of high_standard ponds. Form: Joint venture or exclusive funding. Investment: ”ē2 million.

21. Fuqing Crocodile Breeding. Status: Importing crocodile varieties from Thailand to supply for Fuzhou Crocodile Park. Form: Exclusive funding. Investment: ”ē3 million.

22. Fuzhou Electron Tube Factory¬šs glass tube project. Status: An annual output of 12 million pieces. Form: Joint venture. Investment: ”ē300 million.

23. Z108__Z130 Wheeled Loader and Small Caterpillar Combine. Status: Annually manufacturing 2,000 units of small wheeled loader and 4,000 units of small caterpillar combine. Form: Joint venture. Investment: ”ē18 million.

24. Numerically Controlled Lathe Processing Center or Electro_mechanical Product. Annually manufacturing 370 units of numerically controlled lathe. Form: Joint venture. Investment: ”ē5 million.

25. ADC Foaming Agent. Status: An annual output of 15,000 tons. Form: Joint venture. Investment: ”ē15 million.

26. Plasticizer. Status: An annual output of 50,000 tons. Form: Joint venture. Investment: ”ē10 million.

27. Unsaturated Resin. Status: An annual output of 300 tons. Form: Joint venture. Investment: ”ē8 million.

28. High_grade Industrial Adhesive Bonded Fabric Production Line. Status: Importing key equipment for annually producing 5,000 tons. Form: Exclusive funding. Investment: ”ē20 million.

29. Offset Printing Ink. Status: An annual output of 2,800 tons. Form: Joint venture or cooperative partnership. Investment: ”ē4.8 million.

30. Cement Products Production. Annually producing 300,000 meters of PRC piling and 20,000 meters of water piping. Form: Joint venture, cooperative partnership or exclusive funding. Investment: ”ē7.2 million.

31. Environment_Friendly Packing Materials. Status: Producing environment_friendly packing materials and products, with an annual output value of 23.99 million yuan. Form: Joint venture or exclusive funding. Investment: ”ē3.58 million.

32. Electronics Industrial Zone for Taiwanese_Funded Enterprises in Mawei. An area of 1 square km in Chang¬šan Port area for attracting Taiwanese_funded electronic enterprises that are already in operation in the mainland. Form: Joint venture. Investment: ”ē20 million.

33. Nagasaki Industrial Park in Mawei. Status: Introducing projects of bio_pharmaceutical industry and fine chemical industry and other projects from Japan. Form: Exclusive funding. Investment: ”ē20 million.

34. Everbright Science and Technology Park. Status: To be built on a tract of 1 square km. Form: Exclusive funding. Investment: ”ē30 million.

35. CDMA Cellular Phone and Passive Optical Fiber Intake Equipment. Status: Introducing the latest technology and equipment. Form: Joint venture or cooperative partnership. Investment: ”ē50 million.

36. Quick Fire Extinguisher. Status: Multi_functional fire extinguisher integrating space, fire_fighting and electronic technologies, which can inject both liquid gas or power fire_extinguishing agent. Form: Joint venture or cooperative partnership. Investment: ”ē9 million.

37. Longfengtou Beach Tourist Area. Building a 5,000_meter dike and subjecting the newly built beach to comprehensive development of tourist facilities by foreign businesses. Form: Joint venture, cooperative partnership or exclusive funding. Investment: ”ē20 million.

38. Mawei Holiday Resort. Statue: Covering 100 hectares, where fruit trees, flowers and other kinds of plant will be grown, and a number of courtyard farm_houses will be built. Form: Joint venture, cooperative partnership or exclusive funding. Investment: ”ē6 million.
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China¬šs pharmaceutical market is becoming more attractive for foreign investors after some reform measures have been implemented. As a result of welfare reforms which have led to less subsidies from the State, the market now calls for more efficient drugs. Pharmaceutical manufacturers are strengthening their efforts in seeking business opportunities in China at a time when the nation¬šs growing population of the elderly needs more and better medical care. Chen Tianxiao, a division director with the pharmaceutical department of the State Economic and Trade Commission, said more foreign businesses are targeting China¬šs market.

As China steps into an aging society in an accelerating way, experts pointed out that people are anticipating less support from their children but spending more on medicine and thus the ”°health first" philosophy of living is prevailing. Therefore, the market prospect in this field is good. China already has 1,700 foreign-funded pharmaceutical projects. The fledgling domestic biomedical sector, including cloning and gene technologies, will follow the world trend in becoming profitable. Foreign investment is allowed in this sector and the State Drug Administration is processing the applications for this. More than 10 biomedicine are already in production. Output of drugs this year would reach 186 billion yuan (”ē22.5 billion), compared with last year¬šs 170 billion yuan (”ē20.6 billion). The output value in the year¬šs first five months stood at 75.4 billion yuan (”ē9.1 billion), a 19£„ increase over the same period last year.

To make sure the market keeps improving, the government will take measures to regulate and restructure the field. One way was to cut the number of pharmaceutical producers, more than 6,300 at present, by 50£„. So far in China, three central government_sponsored centers, 30 State laboratories, institutes in 30 colleges and 200 enterprises are engaged in biomedical research and development.
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The city of Yuxi, in Southwest China¬šs Yunnan Province, is already a powerhouse of tobacco production, driven by the giant Hongta Group. But now Yuxi aims to turn itself into a center of bio_industry. The Yuxi High_Tech Industry Development Zone is expected to be a pioneer in promoting this structural adjustment process. The local tropical climate and various special geological conditions give the zone abundant biological resources. For example, more than 200 hectares of mild aloe are growing in Yuxi¬šs Yuanjiang Valley, laying a sound foundation for the development of an aloe industry. Aloe is a valuable plant broadly used in many fields such as cosmetics, medicine and health protection foodstuff sectors. By 2010, China¬šs total demand for aloe products is expected to be worth over 20 billion yuan (”ē2.4 billion) annually.The high_tech zone is importing foreign advanced technology to develop its aloe resources. Business people from Japan, the United States and Europe have shown great interest in launching cooperation with the zone.

But the zone¬šs principal need is not capital but up_to_date technology. As a consequence, a new strategy to absorb advanced technology and well_known brands had been implemented. In the long_term, the zone will create its own brands to boost its promising sectors. The zone has also set up a special information institute to hunt for knowledge at home and abroad. The zone is also determined to provide top_class services and high salaries to lure and cultivate top talent. Established in September 1992, the zone had approved 194 investment projects with total capital of 7.17 billion yuan (”ē863.8 million) by October 1998. 23 foreign investment projects, including 18 joint ventures and five wholly_owned projects, have utilized ”ē24.2 million in foreign capital.
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The first China International Agrochemical Exhibition will be held at the China Agriculture Exhibition Hall in Beijing November 2_5. The event will show the industry¬šs determination to increase competitiveness through international cooperation. The agrochemical products on display will include pesticide, herbicide, fertilizers, plastic films, biotechnologies for agricultural use, feed additives, rubber products and chemical building materials. Currently, China has the capacity to produce 750,000 tons of pesticide and herbicide a year, with an actual output averaging 400,000 tons a year, ranking the second largest in the world. About 95£„ of pesticides and herbicides have proven to be highly efficient products with little chemical remains in plants when put into practical use. In 1998, more than 100,000 tons were exported, earning ”ē320 million in foreign exchange. Exports have exceeded imports for the past five years. However, China still lags behind developed nations in terms of product varieties, production technology and expertise, as well as investment in research and development.

Fertilizers will become the main item on display at the exhibition. According to a report from the Ministry of Agriculture, the ratio of contribution of fertilizers to yield increase has amounted to 40£„. Currently, China is self_sufficient in nitrogen supply, but still falls short of demand for phosphate and potash fertilizers. Analysts say if China joins the World Trade Organization, the domestic fertilizer industry will suffer tough competition from foreign counterparts since the costs of their fertilizers are much lower than those in China. Over the past few years, China has invested significantly in fertilizer projects to support development of agriculture.
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A joint venture between Yangzi Petrochemical Industrial Corp (YPIC) and Eastman Chemical Ltd has begun with the construction of a ”ē29.5 million plant to produce hydrocarbon resin for adhesive manufacturers.The plant, expected to open by late 2000, will be the first of its kind in China to use proprietary Eastman technology to produce Eastman hydrocarbon resin. Eastman Chemical Ltd is a subsidiary of the US_based Eastman Chemical Co. The venture is Eastman¬šs first ever in China. The plant will be Eastman¬šs first outside of the United States to produce Eastotac resin. The world_scale manufacturing facility will use C5 distillate, a byproduct from the manufacturing of ethylene, to produce Eastotac, used by manufacturers to produce hot melt adhesives for infant and feminine hygiene products, packaging, glue stick, tapes, labels and other adhesive applications.
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The German_based Messer Group, one of the world¬šs biggest industrial gas producers, plans to expand its investment in China as part of the company¬šs global strategy. By 2000, Messer¬šs total investment in China will reach ”ē300 million. The company has so far invested ”ē190 million to establish 17 enterprises. The latest investment move by Messer is a deal signed in June with the Zhenhai Refinery Co Ltd to set up a joint venture producing carbon dioxide in Ningbo. The venture, involving a total investment of ”ē7.7 million, will have an annual production capacity of 50,000 tons of carbon dioxide used in food freezing and beverage businesses. Negotiations were under way with the China Petrochemical Corporation Group for cooperation projects involving ”ē100 million of investment, although the details were not available.
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A large drug plant funded by the Glaxo Wellcome Company of Britain, one of the world¬šs leading pharmaceutical firms, is scheduled to become operational in the Suzhou Industrial Park in March next year. The plant, which costs ”ē232 million for the first phase of construction and covers an area of 14 hectares, will be the largest production center set up by Glaxo Wellcome in the Asia_Pacific Region. A Glaxo Wellcome spokesman said the company is confident of its development in the industrial park and will increase investment in the city in accordance with market needs. The Suzhou Industrial Park was jointly established by the Chinese and Singapore governments 1n 1994, and to date has introduced ”ē6.07 billion of investment from overseas. On June 28, a memorandum of understanding on further development of the park was signed between the two countries. Under the memorandum, shares held in the park by the Chinese side will increase from 35£„to 65£„ as of the year 2001, while the shares held by the Singaporean side will be reduced from 65£„ to 35£„.
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