China has further loosened its restrictions over foreign bank renminbi service in a bid to expand its financial and fiscal market. According to a circular issued on August 9 by the People's Bank of China (PBOC), branches of foreign banks in Shanghai can now provide renminbi-based services to the neighboring provinces of Zhejiang and Jiangsu. Shenzhen branches are also authorized to deal with customers from Guangdong and Hunan provinces and the Guangxi Zhuang Autonomous Region. The circular has also lifted the ban on interbank renminbi's circulation and allocation between branches in Shanghai and Shenzhen. Under the program, these foreign banks are also authorized to obtain renminbi commitment from Chinese domestic financial institutions, which will serve as a large portion of the insurance for their renminbi loans and deposit service. The ratio of a foreign bank's renminbi to foreign exchange debt has been raised from 35% to 50%. At the same time, foreign banks handling renminbi business are required to charge obligation and management fees when organizing consortiums, while branches of the same bank at different localities are permitted to freely allocate and transfer their renminbi accounts.

Prior to the central bank's decision to extend their business area, the Shanghai and Shenzhen branches of foreign banks could only do business with local companies in the two cities. Since China opened its local currency business in Shanghai in late 1996, steps have been taken to allow overseas banks with renminbi business licenses to expand the area in which they can do business, broaden their business scope and widen their sources of renminbi-based capital. Shenzhen was opened for foreign banks' renminbi business last year. The move shows that the Chinese Government feels confident about opening-up. The renminbi service began in June 1997, but it has not been satisfactory so far. The total amount of renminbi deposits in foreign banks had hit 3.1 billion yuan ($374.4 million) and loans had reached 1.7 billion yuan ($205.3 million) by the end of June.

The lift is a step to further open the nation's financial market in a bid to spark the growth of foreign financial institutions. The decision also serves as one incentive to propel the development and reform of domestic commercial banks,especially those State-owned banks as the banking market becomes more and more competitive. Possible negative effects caused by the expansion does not seem to be a big concern of domestic commercial banks.
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China's latest reform of its stock issuance system is expected to stimulate development of the country's fledgling capital market and the reform of State enterprises. The China Securities Regulatory Commission (CSRC) issued in July new regulations under which State firms, listed firms and legal persons of all kinds of ownership are allowed to buy A shares in initial public offerings (IPOs) by large capitalization companies. The regulations stipulate that companies with capital of more than 400 million yuan ($48.3 million) can choose to conduct their IPOs through a combination of public offerings and share placements to institutional investors. Shares placed with institutional investors should not be less than 25%, but no more than 75% of the total issue of an IPO. State and listed firms must retain shares for at least three months. If they are deemed to have a close relationship with the issuing company, they are considered ˇ°strategic investors" and must hold the shares for six months. No single firm may buy more than 5% of the total of an IPO. Companies which have an equity interest in the issuing firm or are part of a related group cannot buy IPO shares under the new rules. The rules also ban State and listed companies from using bank loans or proceeds from share or debt issues to buy new issues. In addition, the rules also allow companies making IPOs and their underwriters to set issue prices.

In the past, China had a limited number of institutional investors in the stock market, a majority of them are brokerages and securities investment funds. Now, State firms and listed firms will become institutional investors and they have better understandings of industries, markets, and firms of which they will hold stakes. Allowing more institutional investors to enter the stock market can effectively boost demand in the stock market and ease capital pressure aroused by market expansion. State enterprises can benefit much from the new move which also opens a new investment channel for them. These enterprises can invest their funds into listed companies which meet requirements of their development strategy. For companies that choose to place shares with institutional investors, introduction of strategic investors not only means they can have stable strategic partners, but can also help reduce the volatility of their share prices.

This move is hailed as a key step to ensure the stable operation and long-term development of the stock market and will as a result bring a big group of institutional investors to the stock market. Industrial experts said a large number of strongly capitalized State-owned enter-prises are expected to issue shares following release of the new rules.
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China is committing itself to a more favorable environment for its export-oriented companies by reducing intermediary procedures and charges as well as lifting restrictions on trade. Zhang Zhigang, vice-minister of the State Economic and Trade Commission (SETC), said recently that China has raised the overall export rebate rate by 5.51% this year, which is of crucial importance for export promotion. There are more than 10,000 export companies in China with an annual export volume of $40 billion. The country will further implement its foreign trade reform, which, after restrictions are removed on certain procedures in the export industry, should ease the burden on export-oriented companies. At the same time, the government will give qualified domestic manufacturers access to foreign engineering contracts and labor-export businesses, and improve regulations on foreign trade such as increasing quotas for brand-name products.

A number of charges and fees in the export process will be reduced or removed in favor of export companies. In addition, financial institutions have given their support to export-oriented firms in terms of export credit, credit insurance, and other financial instruments.
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In view of the fact that the B share market still plays an irreplaceable role in luring foreign funds to China, related policies and measures to cultivate and develop the market are under way, reveals a senior official of the China Securities Regulatory Commission recently. These favorable policies include setting up of Sino-foreign B share joint investment funds, expanding the scope of B share subscribers, and improving the circulation method of B shares. Market analysts said that these favorable policies being formulated by Chinese government are aimed at activating the B share market.

From the end of 1991 when the first B shares of Shanghai Vacuum Electronics were listed at the Shanghai Stock Exchange, to the end of 1998, a total of 105 companies had issued more than RMB30 billion worth of B shares at the Shanghai Stock Exchange and the Shenzhen Stock Exchange. The B share indices of the two stock exchanges had hit a record high of 201.86 points and 140.85 points at the primary stage, but since then, the entire B share market has kept going down to an extreme shrinking of turnover.

Besides the dull macro economic environment caused by the Asia financial crisis, another two key factors may contribute to the sluggishness of the country's B shares. Firstly, the market scale is too small to attract foreign institutional investors, the main force on the international capital market. Moreover, domestic investors are forbidden to enter the market, slimming the channel for legal entrants. Secondly, the performance of profit is poor and the management including information release of B shares companies is not standardized.

In a bid to stimulate the economy, the Chinese government has recently taken some measures, which have also given an impetus to the stock market. The stock market has made a warm response since the central bank announced to cut the interest rate on June 10. With B share index of Shanghai Stock Exchange reaching 47.16 points on last June 14, the highest point in the past 13 months.
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With a firm commitment to the development of cross-Straits economic cooperation, the central government will soon issue detailed rules and regulations allowing better implementation of the Taiwan Compatriots Investment Protection Law, According to the Ministry of Foreign Trade and Economic Cooperation (MOFTEC). This aims to fully protect all the legitimate rights of Taiwan investors on the Chinese mainland. The soon-to-be-unveiled regulations will include more detailed and applicable rules for the protection of small and medium-sized Taiwan businesses whose management have made investments on the main-land. The protection available to these companies, which account for the majority of Taiwan-invested companies on the mainland, is relatively weak and needs to be improved. Protection will also be extended to Taiwan businesses that have made investments on the mainland in the name of third-party investors who hope to be treated as a Taiwan investor. Because of the Taiwan authorities' restrictions on Taiwan businesses' investments on the mainland, quite a number of Taiwan investors have entered business on the mainland via a circuitous route, such as by first getting registered in a third country or region.

To promote cross-Straits economic cooperation and to protect the interests of Taiwan investors has become especially significant because Taiwan's so-called ˇ°president" Lee Teng-hui has risked the benefits of Taiwan's residents by openly advocating the ˇ°wo-states" idea. MOFTEC Minister Shi Guangsheng pledged recently that the central government would continue to encourage Taiwan businesses to invest on the mainland in accordance with the Protection Law and the upgraded implementation regulations. No matter what circumstances may arise, the mainland will always take pains to protect the legal rights of investors from Taiwan. The minister underlined the importance of the ˇ°one country" principle in the development of cross-Straits trade and economic cooperation ties. The history of the past two decades has proven that cross-Straits trade and economic cooperation will flourish when the 'one China' principle is maintained, but that it will be hurt if the principle is abandoned. Statistics from the General Administration of Customs indicate that the cumulative cross-Straits trade volume was $147.6 billion by the end of June. Taiwan businesses were involved in 42,653 projects involving $42.8 billion in pledged capital and $22.6 billion in actual input.
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China will launch a nationwide campaign to clean up all the random charges and fees imposed on foreign-funded enterprises (FFEs), the State Development Planning Commission and the Ministry of Foreign Trade and Economic Cooperation announced on August 25. The campaign will target administrative sectors, institutions with administrative functions and intermediary organizations that have been involved in the collection of fees from FFEs since 1998.

The campaign aims to halt and punish illegal fee-collection practices including: 1. Setting up payable items without permission from related authorities; 2. Randomly raising fee standards and expanding the fee-collecting targets; 3. Not eliminating the fee items that the central government has implicitly ordered to cancel; 4. Not implementing the central government's preferential policies on fee reductions; 5. Transferring certain governmental functions to intermediary sectors and charging for the service; 6. Collecting fees according to the items and standards set up by local government arms without authorization; 7. Charging for fees in the form of guarantees or securities and forcing businesses to accept the charged services.

To ensure the success of the campaign, SDPC and MOFTEC are encouraging foreign-invested businesses to honestly write down all fees and charges imposed on them and take the initiative to report any unreasonable fee-collecting activities. The government is determined to root out all illegal fee-collecting activities with strong punishment measures, said two ministries. All overcharged and randomly collected money will be returned to the related enterprises or submitted to the State coffer. The two ministries will help foreign-invested enterprises keep abreast of the fee cancellations made by the central and local governments and guide them to fight against the random fees.
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China is to take steps to tidy up some of its industrial sectors and put an end to duplicate construction projects. Small outdated plants in the coal, metallurgy, oil refining, glass and cement industries are to be closed down and the overall production scale in some industries controlled to prevent unnecessary projects. This is a major step forward in the effort to stop duplicate construction and speed up the restructuring of major industries and key enterprises, according to the State Economic and Trade Commission. The small plants to be shut down include small glass and cement factories, oil refineries and steel mills that waste energy and pollute the environment, illegal mines and irrationally distributed small coal mines. With backward technology, these plants and mines usually turn out shoddy products, and workers' safety is put in jeopardy by their poor working conditions.

Another headache facing the commission is the surplus of industrial products. Official statistics indicate less than 60% of production capacity is used to produce half of the country's industrial products. The commission has set its main target this year as controlling the scale of industrial production in textiles, coal, petrochemicals, tobacco and metallurgy. The commission will issue a plan stipulating a fixed amount for the production of cigarettes and tobacco. All enterprises in the industry must adhere to the plan.

The government will issue preferential policies including financial support to the textile industry, traditionally a labor-intensive industry. The commission is also encouraging the formation of large enterprise groups in the petrochemical sector. It will submit a general plan for production scale in the metallurgy sector and reach agreement with enterprises concerned on the final scheme. The control of the scale of production and the tidying up of small plants are an important part of the strategy aimed at helping State-owned enterprises out of the red in three years.
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Beijing can expect to exceed this year's goals for economic development. In the first half of this year, Beijing achieved a gross domestic product (GDP) of 95.47 billion yuan ($11.5 billion), an increase of 11.9% over the same period last year. The growth rate was 2.8 percentage points higher compared with that of the same period in 1998, and 2.9 percentage points higher than forecast. Regarding the capital's 67 key construction projects, 14 have been finished, with the rest progressing as scheduled. By the end of June, Beijing has invested 84.66 billion yuan ($10.2 billion), 72.1% of the planned amount.

The municipal government announces recently that the municipalˇ°Opinions on Further Development of New and High-Tech Enterprises" has been officially put into effect. The document's 12 articles elaborate a series of preferential policies to promote the development of new and high-tech enterprises in six aspects of registered capital, title, staff, headquarters, change of ownership and deadline for registration.

Stipulations include: 1. On the condition that a guarantee can be provided, a new and high-tech enterprise can still be registered though its registered capital hasn't been fully paid. 2. For a new and high-tech enterprise of less than RMB500,000 of registered capital, whereas the technology owner joins in the equity with the new or high-technology, the enterprise can account the technology as a part of the registered capital in accordance with related agreement by the shareholders or the articles of association of the corporation. 3. For a new and high-tech enterprise of more than RMB500,000 of registered capital, it's particular name shall be protected for own use in one or more industries while it's TMs can be transferred. 4. Whereas a returned student contributes his/her technological results in the equity of a new and high-tech enterprise, the corresponding enterprise can be registered as a Chinese-funded enterprise on the strength of the Chinese passport of the student. 5. Foreigners and persons from Hong Kong and Macao are allowed to be appointed as members of the board of directors or board of supervisors, or managers in Chinese-funded new and high-tech enterprises.

Statistics showed that there are now about 12,000 new and high-tech enterprises in Beijing. Since the beginning of this year, there have been over 4,000 enterprises newly set up in which those of fledgling industries as electronics and information to account for 50% of the total in the service trade and the proportion is growing.

Beijing Economic and Technological Development Zone is building a ˇ°valley" for medical and biological companies whose output value will be 2 billion yuan ($240 million) by 2000 and 4 billion yuan ($480 million) by 2010. The ambitious blue print includes housing at least 10 giant enterprises in the valley, each of which has an output value of 1 billion yuan ($120 million). A biological industry garden will be built in the zone by the end of the year. To attract investors, the center will provide comprehensive services in setting-up funds, providing market information and intellectual property rights protection. The zone will draw financial aid from the municipal government. It has helped a couple of enterprises apply for government investment this year. The zone will also set up investment funds for business starters, especially those producing new medicines. High-tech biological medical projects of strategic importance will have priority to get loans. The zone offers them rent discounts or delayed collection of the rent. Both domestic and foreign enterprises in the zone are exempt from taxes in the first two years after they start making a profit. Taxation is cut by half for the following three years.
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With abundant resources and an improved investment environment, Southwest China's Sichuan Province strongly appeals to investors. Last year, Sichuan attracted about $1.6 billion in contractual foreign funds, $1.1 billion of which was actually invested in the province, up 21% over the previous year. By early May this year, foreign investors had launched 62 enterprises in the province with a total investment of over $200 million, doubling the amount in the same period of 1998. Meanwhile, more multinationals invested this year, such as the Lafarge Company of France launched a cement joint venture, the largest of its kind in Southwest China, with an investment of $130 million; GE of the United States plans to invest $10 million to launch a chemical machinery enterprise; Motorola has decided to build an electronic element production base in the Chengdu High-Tech Zone. The province's achievement was especially significant considering that the national rate of new foreign investment slowed and that other provinces introduced even less foreign funds in the previous year as the aftermath of the Asian financial crisis continued to bite.

Located in the upper reaches of the Yangtze, Sichuan is the third most populous province with nearly 85 million people. Since China adopted reform and opening-up policies in late 1970s, it has witnessed unprecedented economic development. It is the most powerful province in the entire western part of the country in terms of comprehensive economic power. Last year, its gross domestic product was 358 billion yuan ($43 billion), accounting for 4.5% of the national total and ranking 10th in the whole country. Covering 0.7% of China's territory, Sichuan's Panxi region boasts 13% of the country's iron mineral, 91% of its titanium, 69% of its vanadium and 82% of its cobalt. The region's rare earth deposits rank second in the country.

By the end of 1998, Sichuan had approved 4,993 foreign-funded enterprises with nearly $12 billion in contractual foreign funds, nearly $5.8 billion of which had been put into the province. According to a World Bank report, the investment environment in west Sichuan with Chengdu as the core almost matches that of the Yangtze and Pearl River deltas. The province would not impose any new fees on foreign-funded enterprises in the next two years. It encourages foreign firms to reject charges not stipulated by the provincial government. Sichuan is simplifying business procedures. A ˇ°one-stop" service for investors has been launched. The province has established an office to select and promote promising cooperative projects and to launch supervisory and co-ordinating services for investors. For the sake of convenience, the province has listed 260 key projects for foreign investors. Its economic development would be concentrated on the electronics, information, machinery, metallurgical, building materials, food, chemical, pharmaceutical and tourism sectors. Sichuan has also modified many of its policies concerning foreign investments and launched a series of encouraging measures to attract domestic investors.

In the first half of this year, Sichuan's gross domestic product (GDP) registered 152 billion yuan ($18.4 billion), up 6.1% over the same period last year. But it fell short of the target of an 8% growth rate in the GDP and was 1.5 percentage points lower than the national average. It was the slowest growth rate since 1991. In this period, industrial growth contributed only about 41% to the GDP, nearly 14 percentage points lower than the same period last year. The slow economic growth resulted from the decline in the production of color television sets of the Changhong Group Corp and companies in the heavy industry sector. In the first six months, companies in the heavy industry sector produced 4.7% less raw coal and 21.4% less electrical machines. Many elements may be conducive to steady economic recovery in the next half of this year, though. For example, the province is expecting a bumper grain harvest later this year as its rice is growing well. Its rural township enterprises are hopeful of maintaining a high economic growth rate. This year's economic growth target can be achieved if the province does a good job by investing hefty in fixed assets and stimulating domestic demands.
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Wuhan, capital of Hubei Province, located in the middle reaches of the Yangtze River, is now home to 3,458 overseas-financed businesses, with overseas investment accounting for a quarter of its fixed assets. Statistics show that by the end of May, these overseas-funded enterprises had funneled in $2.9 billion of investment. They will invest a total of $4.7 billion according to contracts. Out of the world's 500 top companies, 29 have made investments in Wuhan, while 45 others have set up business offices and another 63 have sent missions to make inspections in the city.

Many of the overseas investors have been increasing their investments in the Central China city since the start of the year. According to local officials, the city would concentrate on opening up markets in Europe, the United States and Japan, and stepping up cooperation with Hong Kong Special Administrative Zone. The city would soon work out a list of major projects for overseas investment, and would keep improving the investment environment and drafting preferential policies to attract more multinationals to Wuhan.
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Anshan, in Liaoning Province, has stepped up its pace of opening to the outside and its transformation from a closed economy to an open economy, resulting in the promotion of economic development. The city has made marked progress in the utilization of overseas investment. Anshan has approved 918 foreign-funded projects, with $2.22 billion in contracted overseas funds. Foreign investment valued at $235 million has been used. The city has expanded the scale and fields of projects using foreign capital. Overseas funds have been used in agricultural, industrial and tertiary industrial sectors. Last year, foreign-funded enterprises generated 9.84 billion yuan ($1.18 billion) in output and earned $340 million in foreign exchange. Meanwhile, foreign trade in the city has increased continuously. From 1992 to 1997, total foreign exchange earnings were $1.5 billion with an annual growth rate of 25.8%. Last year, the city received $358 million in foreign exchange earnings.

Anshan has implemented preferential policies to attract more domestic and overseas investors. As a State Council-approved open city, Anshan enjoys all the preferential treatment given to coastal regions. During the past two years, the city formulated regulations concerning speeding up the pace of opening up and on the use of foreign investment. Investors in Anshan can expect more preferential policies in project endorsements, exemptions and reductions in income taxes, land utilization, readjustment of foreign currencies, employing workers as well as in the supply of energy and raw materials.

The Anshan Foreign Economic and Trade Commission has opened its administration to the public and overseas investors. Approvals, principles, guidelines and results of handling affairs are all more transparent. They can be supervised by the public. Overseas investors can compete requirements for establishing foreign-funded enterprises at one place and with a deadline. To offer good services to joint ventures, Anshan has set up a foreign-funded enterprise association and a consultation and complaint-co-ordination center for foreign-funded enterprises.

In addition to computer networks, the city has strengthened contacts with foreign enterprises and agents to expand economic cooperation. Anshan will greatly promote the development of three pillar industries, including metallurgy, machinery and textiles. It plans to stimulate three new and high-tech industries including electronic information, precision chemical as well as biomedical sectors. The city will accelerate the process of agricultural industrialization, enterprise grouping, developing new and high technologies and its modernization drive. Recently Anshan offered some projects seeking overseas investment. Some of them are as follows:

1. A project involving boiler-serials of semi-coke-carrying-heat producing gas and steam circulating bed. Classification: Technological upgrading. Investment: $15 million (Foreign investment: $5.4 million).

2. Hot-Rolling H type steel. Classification: Technological upgrading Investment: $36 million (Foreign investment: $18 million).

3. A project involving multi-layer co-extruded flowing extension film. Classification: New construction. Investment: $5.98 million.

4. Thermometal composite plate with an annual output of 5,000 tons. Classification: New construction. Investment: $5.3 million.

5. Large diameter straight-seam covering up with radian pipe with an annual output of 150,000 tons. Classification: New construction. Investment: $36 million (Foreign investment: $10 million).

6. Coal tar with an annual output of 400,000 tons. Classification: New construction. Investment: $132.5 million.

7. Annually producing 100,000 auto satellite deflectors. Classification: New construction. Investment: $21.67 million.

8. Carbon 5 oil resin. Classification: Technological upgrading. Investment: $10.2 million (Foreign investment: $4 million).

9. Artificial synthetic lysine. Classification: New construction. Investment: $8.3 million (Foreign investment: $4.5 million).

10. Producing quality synthetic fertilizer with urban daily rubbish. Classification: New construction. Investment: $15.62 million. (to be continued)
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China's building materials industry expects to provide numerous opportunities for foreign investment during the coming two to three years. The nation has selected 69 projects involving a total investment of 15.78 billion yuan ($1.9 billion) for overseas investment during the Third China Fair for International Investment and Trade scheduled to be held in Xiamen September 8-12. To date, China has introduced more than $5 billion in overseas funds for use in the building materials industry.

The State Administration of Building Materials Industry (SABMI) will continue to try to create a more favorable investment climate for overseas investors. SABMI has already established base prices for flat glass, cement, plateboard and glass fiber to maintain a fair market order. It has joined hands with relevant departments to combat fake products. SABMI will also help overseas-funded firms solve practical difficulties. SABMI will provide an overview of China's building materials industry, development trends, technical and economic policies during the Xiamen fair.

A symposium on promoting investment in the building materials sector with an emphasis on building materials for housing will be held during the fair. Government officials from local building material authorities and representatives from domestic building enterprises with projects utilizing foreign investment will be encouraged to attend the symposium. China has a large building materials market as a result of the accelerated pace of construction of infrastructural facilities and housing projects. The country needs to build about 1.2 billion square meters of housing annually during the next 10 years. Overseas funds are welcomed to help the industry's product mix readjustment and for environmental protection.

All overseas-funded projects must meet international environmental protection standards. The country is encouraging construction of large cement plant projects and technological improvements in small cement plants. In sanitary ceramics production, the focus will be on improving product quality. China is particularly encouraging the establishment of research and development centers for glass fiber reinforced plastic and other new building materials and is seeking the sustained development of related technologies. During the first four months, China's production of building materials made big headway. The quality of the products has improved.
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The city of Leshan in Sichuan Province expects to fulfill its 9% economic growth target for 1999 by seeking new growth opportunities. The city has chosen five areas where great potential has not been given full play, and will try to turn them into propellants for this year's economic growth. These five areas are the private sector, State enterprises, tourism, foreign capital influx and high technologies. Full attention is likely to be given to the development of the private sector.

The private sector currently accounts for one-third of the city's economy. Leshan will increase official efforts to help a group of private firms build up their strength to lead development of the entire private sector. Private businesses are not subject to any discrimination by the municipal government. All private firms are encouraged in raising funds as long as they are creditworthy, profitable and meet market demands. In order to reduce financial risks to banks that fund small businesses, the local government is pondering the feasibility of setting up a cooperative guarantee fund by private enterprises.

Eight firms in Leshan were still on the government's list of 2,650 money-losing large- and medium-sized State enterprises by the end of last year. In order to reach its target, the city will take all available measures, including improving assets structures and restructuring, and will resort to the means of bankruptcy if needed. Leshan will increase fixed assets investments and try to stimulate consumption this year to drive growth in the targeted areas. Fixed assets investments are set to increase by 20% this year. Rural areas are a vast market for domestic consumption and deserve much more attention.
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China's sugar industry expects to have a sweeter outlook this year despite the forecast that annual output will decline by 650,000 tons to 7.5 million tons. At the end of last year, the State Development Planning Commission approved a guiding price for the 1998-99 production period to limit illegal competition in the sugar industry. It is hoped this will help the industry to regain its former prosperity. The government will issue directive prices for grade-A cane and beet sugar before the purchasing season. It is estimated the new prices will be 3,700 yuan ($446) and 3,900 yuan ($470) per ton respectively. However, a fluctuation of 10%is permitted, and the price of grade-B sugar could be 50 yuan ($6) lower.

At the request of the State Light Industry Bureau, a loan of about 3 billion yuan ($360 million) has been approved by the State Development Planning Commission, the Industrial and Commercial Bank and the Agricultural Bank of China. The loan will mainly be offered to units with a high reputation. The sector, which is basically able to meet market demand, is expected to get out of its present sticky situation this year.

China could rank as one of the biggest sugar producers in the world, but the industry is passing through a difficult phase. A continuous price decline is a major problem. Most sugar refineries cut prices to expand sales so they could earn cash to purchase sugar cane and beet. As a result, only a few of the nation's 500 sugar refineries could make a profit last year. China's largest beet sugar refinery in Heilongjiang Province, with assets of 170 million yuan ($20.5 million), recently declared itself bankrupt, leaving bad debts of 700 million yuan ($84.3 million). The best ways to solve the problem are expanding the scale of production and self-discipline.
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The China United Coal Bed Methane Corp Ltd (CUCBM) and SABA Petroleum Inc of the United States signed a contract in Beijing on August 13 to cooperatively explore coal bed methane (CBM) resources in Fengcheng of Jiangxi Province. This is the sixth formal contract between CUCBM and foreign companies. CUCBM signed five such contracts with Texaco, Arco and Phillips last year. The contract block, which has a total area of 1,541 square kilometers, is expected to have more than 3.71 billion cubic meters of CBM resources. SABA will be responsible for drilling at least 10 CBM wells valued at $4.6 million and bear all risk and expense. CUCBM is likely to sign three more contracts with foreign companies late this year. The CUCBM was granted by the State Council the exclusive right to undertake the exploration, development and production of CBM in cooperation with overseas partners. Texaco Inc of the United States was the first overseas company to join in the project. It signed a contract with CUCBM on January 8, 1998 to jointly explore coal bed methane resources in Huaibei Coal Mine in Auhui Province. China could tap CBM as a new clean fuel source to achieve both ecological and economic benefits. The Chinese Government pays great attention to the utilization of coal bed methane. The State Council granted favorable policies to CUCBM, including tax reduction, duty exemption and the right to make decisions by itself in investments and foreign trade. China's coal bed methane reserves, estimated to constitute about 30,000 billion to 35,000 billion cubic meters, are located about 2,000 meters underground. CUCBM wants to produce 10 billion cubic meters annually by 2010.
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Sony has launched a $410 million joint venture in Shanghai to manufacture electronic products. The Shanghai Suoguang Visual Products Co Ltd is funded jointly by four investors -- the Sony Company, Sony China Co Ltd, the Shanghai Radio and Television Holding Company, and the Shanghai Vacuum Electronics Company. The venture will develop and manufacture large-screen color TVs, high-definition computer monitors and color kinescopes. The venture has four TV production lines, with an annual production capacity of 500,000 sets.
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Siemens AG, one of the world's major electrical engineering companies, is poised to take a major role in China's Three Gorges Project. Gunter Wilhelm, vice-president of Siemens AG, said the company is bidding for the 500 kilovolt transformer, 500 kilovolt gas isolated metal-closed switchgear (GIS) and auxiliary equipment in the project's left bank power station. Siemens will bring a competitive price, a profound technology transfer package and favorable financing proposal. Wilhelm said Siemens will co-produce equipment with Chinese partners, which could be the best manufacturer in China in the fields of gas isolated metal-closed switchgear and transformers. To ensure that the Chinese partners can fully learn this technical know-how, Siemens has made a very detailed description of technology transfer procedure in the tendering documents.
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