The government will reinforce management of foreigner-involved surveying and mapping activities, Huang Yunkang, deputy director of the State Bureau of Surveying and Mapping, said on September 17. In recent years, some foreigners have surveyed parts of the country without reporting in advance to the Chinese authorities. Those foreigners have been conducting mapping and surveying activities while working on other projects such as construction, tourism, mountaineering, exploration, archaeology, and resource investigation.

The Surveying and Mapping Law of the Peoples Republic of China (PRC) stipulates that any foreigner who wants to conduct surveying and mapping activities within Chinas borders and territorial waters must report to the Chinese authorities. But the law was not abided by strictly. Huang revealed a case in which a foreign exploration team carried out surveying and mapping of regions along the Great Wall without registering with the State surveying and mapping administration department. During the teams exploration, its members took along advanced surveying and mapping instruments, including a Global Positioning System and performed illegal inspections. The team received permission for a hiking tour under the name of research along the Great Wall. The activity of surveying and mapping is a matter of national sovereignty and security. If foreigner-involved surveying and mapping in China is not strictly regulated, some military, economic, and other secrets might be stolen.

According to Huang, the reinforcement of the management of foreigner-involved surveying and mapping does not mean such activity is banned altogether by the Chinese Government. The State Bureau of Surveying and Mapping will strengthen its cooperation with other departments and organizations to better manage foreigner-involved surveying and mapping.
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China will adopt a series of policies to boost its technological strength and give an impetus to productivity growth. The government announced recently that it will make more efforts to encourage technological innovation and high-tech research and development as well as the commercialization of new technologies. The policies gave details about guidelines and measures regarding infrastructure construction, investment in scientific research, venture capital and other issues crucial to sharpening the countrys technological competitiveness.

Reform in the technological innovation is an imperative task for China, which will help the country pool its technological talents and resources and launch research programs with commercial orientations. China will create a sound climate to foster high-tech industries and provide solid guarantees to help researchers convert technological breakthroughs and new inventions into commercial products. International cooperation and exchange will be further promoted to absorb cutting-edge technologies from abroad and bridge the gap between China and more technologically-advanced countries.

China will take a long-term perspective in viewing the technological development trends, and attach great importance to basic scientific research as well as technological projects of strategic importance to China. Enterprises will be encouraged to move to the forefront of technological development and heavily invest in technological upgrading to promote their competitiveness in the marketplace. Cooperation between enterprises and universities or research institutes will be stepped up. Through such cooperative projects, enterprises are able to obtain the technological talents and resources necessary for their survival and growth in the market competition, while universities or research institutes are given the opportunities and capital to develop and perfect technologies.

The country will speed up its technology innovation in all its industries, particularly in the agricultural, manufacturing and service sector. Technological development in such fields as environmental protection and comprehensive utilization of resources also holds strategic importance to healthy and sustainable economic development of China. The government will firmly support the technological innovation centers and projects launched by enterprises, universities and research institutions. China will translate the support into a series of detailed preferential policies in financial, taxation and personnel administration. Constructing Statelevel high-tech development zones, promoting the development of private scientific businesses and intermediate technological agencies are also listed as major aspects of the countrys technological innovation.

China will work harder at commercializing high technology discoveries through preferential financial and fiscal policies. Governments will adopt procurement policies for high-tech products and grant technology developing and service firms business tax exemptions. The value-added tax imposed on computer software will be reduced to 6% from the previous 18%. Exports of high-tech products will enjoy an exemption of the value-added tax, whereas imports of advanced technology and equipment that are badly needed in the country will benefit from preferential fiscal policies.

In order to direct academic research toward market-oriented progress, research institutes engaged in applied technology will be transformed into enterprises before the year 2000. The State will work out a guideline to standardize venture capital systems for high-tech industries. Security exchanges in Shanghai and Shenzhen will display high-tech-related boards when conditions permit. For quite a long time, technology-based small and medium-sized firms had difficulties in obtaining loans, because they had no credit guarantors. The Ministry of Finance will implement a scheme to help these firms find guarantees for loans. Developing technology-based small and medium-sized firms is an important task during the next few years. These firms have become a mainstay for the industrialization of technological findings.
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Chinas top legislators said they will make necessary regulations to support the enforcement of Law on Township Enterprises to ensure sound development of township enterprises. The National Peoples Congress (NPC) Agriculture and Rural Affairs Committee listened on August 23 to a report by the Ministry of Agriculture on the development and enforcement of laws governing township enterprises. The Law on Township Enterprises was adopted in 1996, a milestone in the development of township enterprises in Chinas rural areas.

The implementation of the law affirmed the legal status of township enterprises and thus stimulated their development. Currently, one-third of farmers average income comes from these enterprises. Rapid development of township enterprises has greatly pushed forward industrialization of agriculture. General principles are in place but it is difficult to implement because of the lack of specific measures. The legislators urged the State Council to make preferential policies on taxes, loans and development funds for township enterprises.

The State Council was also called upon to draft necessary regulations to make the implementation of township enterprises easier. The peoples congresses and governments at all levels are required to devise local regulations on township enterprises according to actual situations facing them. Some township enterprises took advantage of the loopholes in the law. Some enterprises evade debt and taxation duties and the supervision of administrative departments. The production and operation of township enterprises should be regulated strictly in accordance with the law. Township enterprises are required to enhance their competitiveness by improving their operation system and the quality of their products, raising awareness of environmental protection and safety in production. The rights of township enterprises are vulnerable to encroachment when township enterprises administrative departments at all levels are short of effective enforcement measures. Related administrative departments are urged to improve management and take greater responsibilities in planning, coordinating, offering services and supervising township enterprises. Anyone who violates the law or commits a deed infringing on the rights of township enterprises and their employees will be punished according to the law.
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The existing Marine Environment Protection Law went into effect 16 years ago. Since then great changes have taken place and the current related rules can no longer contain the continuing deterioration of the marine environment. Its learned that a ¡°Draft Amendment to the Marine Environment Protection Law" adding maritime ecological protection and prevention of marine pollution from marine projects, and strengthening penalty for damaging marine environment has been submitted to the Standing Committee of the National Peoples Congress (NPC) for examination.

Zhang Haoruo, vice-chairman of the NPC Committee for Environmental and Resources Protection gave five reasons for amending the existing Marine Environment Protection Law: 1. The discharge of large quantity of city sewage and industrial and agricultural waste water into the sea and the frequent occurrence of marine environment disasters, as well as other activities have resulted in the continuing deterioration of the marine environment. 2. The existing law fails to make clear and concrete standards for marine environment in general terms and, as a result, fails to achieve a sustainable development strategy. 3. Unconcerted responsibility of law enforcing departments causes inefficient law execution and difficulty of applying scientific research results. 4. It is necessary to certify to new stipulations added to some related laws concerning environmental protection and environmental protection system, and measures put in by the State Council and its departments to their new administrative regulations and rules since the operation of the existing law. 5. After joining in some international convention Organizations such as the United Nations Convention on the Law of the Sea, some changes have emerged in Chinas right and obligation in international maritime affairs.

The draft amendment has added new stipulations concerning aggregate control of pollutant in key sea areas, emergency system for marine pollution accidents, systems for civil compensation and insurance for oil pollution by ships, rejection system of outdated technologies and equipment which would release serious marine pollution, and charge of sewage drainage. The set-up of a system for the time limit of pollution control and compensation of damages caused by pollution is also included.

The draft amendment has also included a new chapter of ¡°Marine Ecological Protection", which clearly stipulates the coastal local governments are responsible for marine ecological conditions in the offshore areas of their respective administrative zones, and they should hold responsibilities to the improvement of marine environment which has been damaged, but has high value to the economy and society. The new chapter also makes specific stipulations concerning utilization of seas water, introducing sea-water animals and plants, sea cultivation and fishing, and development of islands and marine resources in the surrounding sea areas.
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61% of the 111 surveyed multinational corporations with investments in Shanghai are optimistic about Chinas economy, and 78% are confident in the future of Shanghais economy, according to the latest statistics from the Shanghai Foreign Trade and Economic Committee. Among these enterprises, 27% are upbeat about the Asian economy. To date, 250 of the worlds top 500 firms and 59 of the 100 largest industrial multinational corporations have set up branches or agencies in Shanghai. More than 75% of the enterprises and agencies polled said the municipalitys investment policies have inspired them to increase their investments, and 66.67% said investment in Shanghai will help them reduce overall costs.

This survey shows that the implementation of the reform and opening-up policy has brought about substantial results over the last 20 years. The main reasons for investor confidence in China are the stability of the Chinese currency, the reduction of bank interest rates and tariffs, and the continued efforts to combat smuggling. However, about half of those surveyed noted that complicated registration and approval procedures cause some problems for foreign investors. To attract more overseas investment, the Shanghai municipal government plans to set up overseas agencies to offer better services and consultations for various businesses.
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In the first half of this year, China signed 491 contracts up 23.4% in number on importing technology and equipment with a total value of $3.345 billion, up 3.46% from the same period of last year, according to the statistics made by the Ministry of Foreign Trade and Economic Cooperation (MOFTEC). Import of technology reached $729 million, accounting for 21.79% of the total. The nations import of technology and equipment in the January to June period witnessed with the following characteristics:

1. Import sources become wider. China imported technology and equip-ment from 26 countries and regions with countries each exporting over $10 million of technology and equipment to China in the period including Germany, the United States, Sweden, France, Japan and Austria. The United States ranked the second instead of the first as before. Owing to the fact that the United States imposed more restrictions on exporting high technologies to China, as a result, China was obliged to turn to such countries as Germany and Sweden.

2. Technology imports focus mainly on sectors as information, transportation, new kinds of energy and environment protection. Major projects of such sectors include projects of national posts and telecom integrated network, upgrading of the national posts and telecom saving deposit network in 2000, increasing capacity of the micro-wave system, developing optical fiber industry, building the Pearl rail line in Shanghai, track route airplanes, third-stage project of Qinshan Nuclear Power Plant, purchase of equipment for Lianyungang Nuclear Power Plant and burning rubbish of Shanghai.

3. Projects contain higher content, more softwares and greater ratio of high and new tech. Technology fees accounted for 21.79%of the total contracted value, up 220.55% over the same ratio in the same period of last year. Meanwhile, the number of imported high and new tech items continued to rise.
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Anhui Province, located in the central area of China, possesses a host of natural and infrastructure resources to attract foreign investment. Benefiting from rich natural resources and a crucial position as a communications hub, Anhui has become one of the top 10 provinces in the country in terms of output of grain, cotton, cement, cigarettes, refrigerators and washing machines. The provinces gross domestic product (GDP) reached 28.06 billion yuan ($3.38 billion) last year. Consumption volume has grown by 16.1% on average in the past 50 years, while financial revenue has increased by 13.1% per year. The provinces tourism revenue, stemming from the famous Huangshan Mountain and the lakes of the Yangtze River, have increased constantly in recent years, hitting more than $70 million last year.

Since China initiated economic reforms and opened to the outside world in the late 1970s, Anhui has been transformed from the countrys energy and grain base to one of the key industrial and agricultural machinery provinces. Anhui also became the flagship of Chinas reforms in the late 1970s when one of its counties was the first to introduce the household responsibility system for farmers. The reform promptly spread across the country like wildfire and gained extraordinary success. During more than two decades of infrastructure construction, Anhui has built 39,264 kilometers of roads, including 294 kilometers of expressways, and 2,156 kilometers of railways. At present, reforms have been intensified in agricultural production, State-owned enterprises, and the social security and residential housing systems.

The provinces foreign trade volume hit $3.12 billion last year, accounting for 9.2% of its GDP, despite the overall gloomy situation for the countrys exports after the financial meltdown in Southeast Asia. The export of industrial products, especially electronics and machinery, held the lions share of exports last year. By the end of 1998, the province had attracted 4,528 foreign-funded projects with a total committed capital of $5.03 billion. In an effort to expand foreign capital inflow, Anhui has opened up 71 cities and counties, established friendly relations with 28 overseas cities, and selected nine ports to provide services for foreign companies. Foreign investment destinations have also shifted from the general industrial processing sector to the infrastructure construction, environmental protection and high-technology sectors.

Anhui has set up two national-level economic development zones and 20 provincial economic zones, which have become channels for the province to expand its economic and technology exchanges with foreign countries. The provincial government adopted a newseries of favorable policies this year to bolster its efforts to introduce foreign capital. The province adjusted the structure of export commodities while emphasizing the expansion of exports.

The government is encouraging foreign-funded companies to introduce advanced technologies and key production equipment while allowing them to undertake appropriate imports. The foreign investment focus will be redirected at the appropriate time from the general industrial processing sector to high-tech industries. The provincial government is also encouraging the development of local tourism, which will become another focus for foreign investment.
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Central Chinas Hunan Province will focus on 10 major ecological projects between now and 2003 in an effort to effectively improve its environment within a relatively short period of time. The wide-ranging projects will center on harnessing slopes and small valleys, water conservancy, afforestation, protecting natural forests and grasslands, and promoting ecological agriculture. Some 20% of Hunans 1 million hectares of farmland with slopes of less than 25 degrees will be transformed into high standard terraced fields by the year 2003 and will thereby reduce erosion by 47 million tons annually, according to one provincial official.

A substantial portion of farmland with slopes of more than 25 degrees would be transformed into ecologically-sound forests. Trees will be planted on hills coveting 2.57 million hectares and grass will be planted on 200,000 hectares in the upper and middle reaches of major rivers by 2003, according to the official. Water conservancy projects will help reclaim cropland covering 3,300 hectares by the year 2003. In another development, the provincial capital of Changsha is to ban the sale and use of leaded gas starting on July 1, according to a circular issued by the municipal government recently. Violators will be penalized in accordance with relevant rules and regulations.

Changsha now has 120,000 motor vehicles which produce 438 tons of harmful pollutants each day, causing serious air pollution and posing a threat to the health of local people, especially to children. The problem has aroused great concern from the local public as the citys number of vehicles is expected to grow at an average rate of 10,000 units a year. The city has begun spreading the use of unleaded gas since 1998 and the use of unleaded gas in over 100 gas stations has reached 70%. China now has approximately 13 million motor vehicles, and the number is expected to exceed 20 million by 2000. Urban air quality reports regularly released by the National Environmental Protection Agency show that auto emissions have become a main source of air pollution in some major cities. Many cities have imposed regulations to ban the sale and use of leaded gas so as to help improve air quality.
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More foreign companies are investing in Yantai, a coastal city in East Chinas Shandong Province. By the end of May, foreign investment there totaled $4 billion. Yantai has become one of the biggest destinations for foreign investment in China. Statistics show that by the end of May, the number of foreign-funded projects reached 5,287, with contractual investment hitting $6.7 billion.

As one of the most attractive investment cities, Yantai encourages large foreign companies to invest in the citys high-tech and large-scale projects. In 1998, the gross domestic product (GDP) of the city reached $80.5 billion, up 12.3% over the previous year. Preferential policies from the central government, a sound investment environment and strong economic capacity help make Yantai an ideal destination for investment.

In the past three years Yantai strengthened its cooperation with multinational companies such as Daewoo and Mitsubishi. More than 40 world-renowned foreign companies have started large-scale projects in Yantai. There are 188 projects each with an investment exceeding $10 million. The total investment in these projects accounts for 47% of the cites total. Daewoo has invested in four large projects, involving $700 million in total foreign capital. Utilization of foreign capital has helped Yantai in shaping its new industrial structure. The city has introduced more than 70 advanced production lines and greatly improved the technical level of its traditional industries.
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11. Qinhuangdao Haigang District Baitaling Taoyuan Area project. Content: The place will be used for apartments and office buildings. The land area is 13.5 hectares and the planned construction space is 54,000-270,000 square meters. The land price is 1,650 yuan ($199) per square meter.

12. The magnesium project with an annual output of 10,000 tons. Investment: $30 million. Foreign investment: $15 million.

13. Production line of special steel with an annual output of 100,000 tons. Investment: $23 million. Foreign investment: $12 million.

14. Iron ore project. Investment: $60 million. Foreign investment: $40 million.

15. Expansion project of trimethylolpropane. Investment: $14.5 million.

16. Expansion project of acrylic fibers with an annual output of 50,000 tons. Investment: $165 million. Foreign investment: $70 million.

17. BOPET ultrathin industrial film project. Investment: $26.1 million.

18. Spandex fiber project with an annual output of 3,000 tons. Investment: $12.3 million. Foreign investment: $7.7 million.

19. Animal husbandry project. Investment: $11 million.

20. Expansion project of the 10,000 deer farm. Investment: $13.3 million. Foreign investment: $4.88 million.

21. Development project of 6,667-hectare colored cotton production base. Investment: $7.5 million. Foreign investment: $4.5 million.

22. Dry red wine bottles project. Investment: $12.9 million. Foreign investment: $9 million.

23. Dry red wine project. Investment: $70 million. Foreign investment: $34.3 million.

24. Condensed fruit juice. Investment: $7.3 million. Foreign investment: $3 million.

25. Apple juice serial products. Investment: $8.9 million. Form: Joint venture, cooperation, leasing or sale.

26. Zushan tourism development. Content: Building roads and six hotels. Investment: $13.5 million. Foreign investment: $5.4 million.

27. Large entertainment park. Investment: $300 million. Foreign investment: $250 million.

28. Forest botanical garden. Investment: $6 million. Foreign investment: $4 million.

29. Golf club. Investment: $30 million. Foreign investment: $25 million.

30. Changli County Golden Beach development project. Investment: $24.1 million. Foreign investment: $12 million.

31. Beidaihe Botanical Amusement Park and International Center for the Elderly. Investment: $13.3 million. Foreign investment: $10 million.

32. Rare-earth ceramic bearings. Investment: $7.23 million. Foreign investment: $5.78 million.

33. Optical fiber and cable project. Investment: $113 million. Foreign investment: $56.45 million.

34. High-grade thin and light glass packaging bottles. Investment: $19.9 million.

35. Production line of antibiotic bottles. Investment: $17 million. Foreign investment: $10 million.

36. Production line of processing 200,000 square meters of granite plate. Investment: $8.25 million. Foreign investment: $4 million.

37. Oil refinery plant with an annual processing capacity of 12 million tons of crude oil. Investment: $960 million. Foreign investment: $960 million.

38. Setting up a production line of transparent electric conductor glass used for color liquid crystal scopes. Investment: $25 million. Foreign investment: $12.25 million.

39. Setting up a production line of towels. Investment: $2.53 million.

40. II type automatic drilling project. Investment: $30 million. Foreign investment: $10 million.

41. Tianwei brand Electric bikes. Investment: $5 million. Foreign investment: $2 million.

42. Setting up a production line of auto parts. Investment: $20 million. Foreign investment: $10 million.

43. Auto discal brake. Investment: $6.5 million. Foreign investment: $4 million.

44. High-tech non-crystal metal transformers. Investment: $6 million. Foreign investment: $3.5 million.

45. High precision three-dimension automatic testers. Investment: $20 million. Foreign investment: $10 million.

46. Setting up a production line of plaster plates. Investment: $29 million. Foreign investment: $9.7 million.

47. Thin plate glass. Investment: $3.6 million. Foreign investment: $1.8 million.
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Industrialization of Chinas biotechnology sector has been accelerating since the mid-1980s. Statistics indicate that more than 200 bioengineering companies have been established since then. By the end of June, 19 genetically engineered drugs had been launched on the market. Domestic sales revenue from interferon soared from 60 million yuan ($7.2 million) in 1994 to 456 million yuan ($55 million) last year. The backing given to the sector across the country is a major factor behind its swift development, analysts say.

The China Biotechnology Development and Research Center, established in Beijing in 1983, has played a major role in guiding the industry. It solicits fiscal support and serves as a bridge for international cooperation. Special commissions have been set up within the Chinese Academy of Sciences, the Ministry of Agriculture, the Ministry of Health, the State Drug Administration and provincial governments to help the sector develop. Biomedicine is the most active sector of biotechnology and has the most promising future, insiders say. However, the sector is still in its infancy and needs support. Output of biomedicine in 1998 was just 5 billion yuan ($600 million). And only four companies had sales volume in excess of 100 million yuan ($12 million).

As China opens wider to the world, imported medicine will pose a growing threat to fledgling domestic biomedicine companies. Per capita consumption of medicine in value terms has been on the rise in the last five years, increasing from 54 yuan ($6.50) in 1993 to 139 yuan ($17) last year, an average growth rate of 16%. However, foreign pharmaceutical firms have been expanding market share at an even faster rate through exports and the establishment of various ventures in China. The share of imported medicine in the Chinese market more than quadrupled from 11% in 1993 to 49% in 1998, statistics indicate. Analysts predict that imported medicine will take a bigger share with the lowering of tariffs and the mounting hopes of Chinas entry into the World Trade Organization.
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The city of Changzhi, located in the southeastern part of Shanxi Province, is striving to optimize its economic structure in a bid to embrace the challenge of global competition in the 21st century. The city was to make every effort to fall in line with the countrys stimulative policies to accelerate the development of its central and western areas. Changzhi is expected to be built into a medium-sized city with a sound economic development level within the next 10 years. According to the citys development strategy, top priorities will go to the agricultural sector, energy, raw materials, light industry, infrastructure, science and technology, education, technological upgrading and the tertiary industry. Moreover, more than 100 projects calling for total investment of 10.9 billion yuan ($1.3 billion) have been outlined by the local government to pave the way for the citys future development.

Five major agricultural sectors -- grain, husbandry, fruits, sericulture and vegetables -- have already been formed. And a comparatively complete modern industrial system has been formed covering coal, metallurgy, power, machinery, chemicals, light industry, medicines and building materials. Last year, the city recorded gross domestic product of 15.2 billion yuan ($1.8 billion) and fiscal revenue of 1.4 billion yuan ($168 million). However, compared to the cities of the coastal areas, Changzhi still lags far behind. Industry experts believe that problems such as irrational industrial structure and overproduction of certain goods and resources, given the oversupply on the domestic market, have hindered the development of the local economy. Lack of science and technology and talents were the two major factors to blame.

In a bid to improve the citys current situation and strengthen its competitiveness, a ¡°knowledge project" was co-launched last year by the local government and the Chinese Academy of Social Sciences to help optimize the citys economic structure and at the same time boost the local economy. More substantial steps were planned to further promote the optimization of the local economy. Changzhi covers an area of 13,896 square meters with a population of more than 3 million. More than 40 mineral deposits have already been verified there including coal, iron, silicon, aluminum and plaster stone. The coal deposits within the area are estimated to be more than 90 billion tons, with deposits of 34.6 billion tons already verified.
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Chinas clock and watch industry has experienced dramatic growth since the late 1950s and the country has become one of the worlds largest timepiece manufacturers and consumers. According to the Customs statistics, the imports and exports of the industry last year topped more than $2.85 billion. Analysts attributed the growth of the industry to a shift in the worlds timepiece manufacturing structure from Europe to Asian countries and regions, including Singapore, Thailand, the Chinese mainland, Hong Kong and Taiwan since the late 1980s. In Chinas Pearl River Delta, more than 800 timepiece-related enterprises have been established. Exports of the industry have long been a driving force for the development of the sector.

Customs sources said that in 1996, industry exports were valued at $1.96 billion. The figure soared to $2.04 billion in 1997. Despite sluggish demand and the negative influence of the global economic slowdown, the industrys exports overall are on the up. Last year, the figure was $1.98 billion. The export of watch movements also experienced high growth, with exports of assembled incomplete watch movements soaring from $3.32 million in 1996 to 42.07 million in 1998. The export of parts and components of watch movements increased from $4.34 million in 1996 to $13.68 in 1998.

Increasing exports to European countries and other areas in the world have helped the industry fight sluggish domestic demand. China has exported its products to more than 100 countries and regions, including Japan, the United States, Hong Kong and to some European countries. Last year, exports to Switzerland reached $96.3 million, 20% more than that of 1996. Exports to Brazil increased from $8.19 million in 1996 to $17.84 million in 1998, an increase of 117.8%. State-owned enterprises have contributed a lot to the export figure. Customs statistics indicate 2,310 companies exported timepieces from China. About 1,380 were SOEs which exported timepieces with a total value of $1.15 billion, accounting for 57.9% of the national total.

However, problems such as a shortage of capital and the great debts of SOEs has hindered the development of the industry. Uncontrolled factors including fake products and low quality has aroused worries in the industry, experts said. Substantial measures are needed to sharpen the industrys competitive edge in both overseas and domestic markets, analysts said. The exterior designs of watches and clocks should be improved to survive market competition.
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The most expensive natural gas project China has ever had was signed on September 23, which will contribute to the use of clean energy and the protection of the environment. The China National Petroleum Corp (CNPC) and Shell Exploration China Ltd inked the contract in Beijing for a project representing an investment estimated at $3 billion. The project, when completed in 2003, will help raise Chinas natural gas development and exploitation. According to the contract, the two firms will jointly develop natural gas in Chinas northwestern Ordos Basin, in Shaanxi Province and the Inner Mongolia Autonomous Region. CNPC, one of Chinas largest oil firms, and Shell Exploration China, a member of the Royal Dutch/Shell Group, will pool efforts in opening markets for the gas to be developed in the 1,600-square-kilometer Changbei Block. The Dutch-Anglo oil giant will shoulder all the capital investment for the development, production and pipeline construction of this integrated project in the gasfield discovered by CNPC. Natural gas makes up only 2% of Chinas energy consumption. The country has long been wanting to improve the mix, but lack of experience and funds hampered efforts. Resources of natural gas in China are estimated at 10 trillion cubic meters. Output last year was 22 billion cubic meters, CNPC expects to increase the output to 100 billion cubic by 2010.
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A long-awaited financing contract signed on September 22 will initiate the first phase of construction for Shanghai Krupp Stainless Co Ltd in Pudong. This deal is one of the largest private investments in Chinas metal-working sector. A key contract signatory is the lead, Shanghai Krupp Stainless Co Ltd. Other parties are Krupp Tyhssen GmbH, the 60% shareholder, and Shanghai Pudong Iron and Steel (Group) Co Ltd, the 40% shareholder. The latter belongs to the Shanghai Baosteel Group. Each partys holding company also agreed to the contracts. Shanghai Krupp came from one of the largest investments in the metallurgical sector of China. The investment for three phases of construction was $1.4 billion. The new company should produce 440,000 metric tons of stainless steel flat products a year. The first phase is a stainless steel cold rolling mill, which is expected to be built at the end of 2001 and produce 72,000 tons annually. It needs $294.8 million. Forming of Shanghai Krupp is one of Chinas efforts to reduce the countrys dependence on imports and even make steel products it can ship abroad. The International Finance Corporation and Kreditanstaltfur Wiederaufbau co-financed the first construction stage of the project.
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Chinas largest agricultural equipment joint venture went into operation in August in the Wuxi New District, a State development zone in East Chinas Jiangsu Province. The Yanma Agricultural Machinery (China) Co Ltd, jointly financed by the Japan-based Yanma Agricultural Machinery Co Ltd and three other companies, invested $30 million in the first phase of the development, production and distribution of agricultural machinery. This will end Yanmas history of selling completed machinery in China, officials from the company said.
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ABB, a global technology and engineering company based in Switzerland, recently announced its 22nd Chinese joint venture in Guangdong Province. Called ABB Zhongshan Transformer Co Ltd, the new company is 51% owned by ABB, and 49% by Zhongshan Transformer Co Ltd, a local company in Guangdongs Zhongshang city. ABB will invest about $30 million in the company during the next three years. It has full management responsibility. The venture will mainly manufacture power transformers. According to an agreement signed by ABB and Zhongshan Transformer, ABB will modernize and upgrade the ventures production facilities, where a wide range of 110 kilovolt and 220 kilovolt power transformers will be manufactured for public utilities and industrial customers in China. The new plant will have a production capacity of 6,000 megavolt-amperes, equivalent to about 70 transformers a year. The total Chinese market for these products is estimated at about 100,000 megavolt-amperes per year at present, said an ABB source. In the long run, the joint venture also expects to export some of its production to other Asian markets.
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