Foreign employment agencies will be allowed to operate in China after it joins the World Trade Organization (WTO), but with some initial limitations, said He Xian, director of the human resources administration center with the Ministry of Personnel. Foreign employment agencies will first be allowed to establish joint-ventures with large-scale, well-operated and government-run Chinese counterparts when the opening begins. With the participation of the foreign agencies, the Chinese job recruitment market is expected to become vigorous. Methods used in the opening are expected to ensure that good service is given to customers and that their methods and management perform as desired.

The joint ventures created are expected to use scientific methods when appraising a job seeker's talents and capabilities. However, the present job recruitment market is immature and is hindered by obstacles to the flow of talented people from one job to another in one place or another. The market's regulators are expected to implement deep reforms affecting the job market and the behavior of those involved in it. The move is expected to make it possible for local agencies to compete on an equal footing with foreign counterparts before the market is fully opened. The construction of a national unified employment information network that will link local networks is expected to be completed in the near future. More than a hundred scattered information networks on the Internet operated by local government-run job sourcing agencies will be included in the system.

Job-seekers who have registered on one of the local networks will gain free access to the national information network. The move could greatly mitigate regional limitations on the flow of talented people, for example, from one province to another. Market regulators are expected to co-ordinate with related departments to solve long-standing problems involved with the country's inflexible domicile system and strict personal file administration system.
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The implementation of a law on solely-owned enterprises is a landmark in China's economic reform and legislation, Zhang Xuwu, vice-president of the All-China Federation of Industry and Commerce, said recently. For many years, private entrepreneurs have complained that the law does not endorse their interests, though the country has many preferential policies for the private sector. The new law was adopted during the 11th session of the Standing Committee of the Ninth National People's Congress last August and went into effect on New Year's Day. One stipulation of the new law is that the nation will protect the property and other rightful interests of solely-owned enterprises. The National People's Congress amended the Constitution last March to elevate the status of the private sector to an 風important component" of the overall economy from a 風complementary" part.

China currently has 32 million self-employed people and 1 million privately-owned businesses.The State Development Planning Commission, in a statement released recently, pledged to create more favorable conditions to encourage private sectors. The statement announced that private investments can be made in all areas with the exception of those related to national security and those required to be monopolized by the State. The law is encouraging for private investors because it offers people with commercial talents and vision who lack huge investments a stage on which to compete in the market. The current Corporation Law stipulates that those wanting to open an enterprise should have at least 100,000 yuan ($12,000) in their pockets. But the new law does not impose a minimum investment. Government officials said that details of the law's implementation are still being worked out.
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Foreign investors are expected to see more opportunities to participate in Beijing's industrial development following the adoption of a new policy. Under the policy, which went into effect with the new year, the capital city will not approve the founding of any new wholly State-owned industrial enterprises. The new measure, aiming to improve ownership structure, will reduce the industrial proportion in Beijing's economy as well as the proportion of State-owned enterprises (SOE) in the city's industry. However, it does not mean that there will be no wholly State-owned industrial enterprises in Beijing. Some particular State-owned industries, such as gold, electricity, water supply and gas, which are closely connected with the national economy and the people's livelihood, should remain the same.

The nation emphasized the importance of increasing the efficiency of State-owned capital in its Ninth Five-Year Plan (1996-2000). Concentrating State-owned capital on the industries vital to the nation's economy and people's livelihood was a primary target in the plan, and reforming and carrying out China's shareholding system was inevitable. The new policy is one step towards the restructuring of State assets. Beijing is the second city to carry out the measure in the country following Chongqing, a municipality in Southwest China. Through invigorating the SOEs' existing assets, establishing a modern enterprise system and raising capital market funds, multi-ownership measures could be realized in Beijing's SOEs.

System reform for SOEs in Beijing has started in several industries, among which electronics, textiles, building materials and automobile were designated as trial industries. By separating government functions from enterprise management, the four industries have organized their own capital-run companies or company groups, and all turned losses into gains last year. Another significant task for the Beijing Economic Commission was giving free rein to subsidiary companies. Under the planned-economy mechanism, such subsidiaries operated according to the mandatory plan, and the results were continuous losses stemming from rigid policies and poor management, which have been a heavy burden not only for the companies but also for the government. One of the key tasks for the capital city this year is to further deepen the reform of the property rights system and the industrial structure readjustment.
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China will crack down on crimes in the foreign trade and economic co-operation sector, Foreign trade vice-minister Sun Zhenyu said recently. Local governments were urged to keep a particularly sharp eye on new illegal schemes. When the central government raised export tax rebate rates last year, a number of firms exaggerate and fake their export figures in order to get larger export tax rebates. This has been a persistent problem, authorities acknowledged. The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) will take immediate actions to cancel the export operation rights of offending companies. MOFTEC will make every effort to expand foreign trade and investment in China this year.

MOFTEC Minister Shi Guangsheng said China will try this year to increase imports and have a different mix of products imported. MOFTEC will put emphasis on importing critical equipment, technology and raw materials that are urgently needed for domestic industrial upgrading. China will revise the Guiding Directory for Foreign Investment and will establish more measures to encourage foreign investment in the reform of State-owned enterprises. The country will also improve foreign investment environment and enhance the government's service to foreign invested enterprises.
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The Notices on Simplification of Formalities for Selling and Paying Foreign Exchange (Forex) to Foreign-Funded Enterprises (FFEs) for Introduction of Technologies was issued by the State Administration of Foreign Exchange last year. According to related rules promulgated by the State Council, the following additions are to be made to the 風Notices on Problems in regard to Strengthening of Administration of Selling and Paying Forex in Introduction of Intangible Assets" to simplify formalities of selling and paying forex to FFEs for introduction of technologies:

1. Whereas the notices rule that for selling and paying forex to FFEs according to contracts of technology introduction as attachments to the joint equity venture contracts, 風Certificates Certifying the Effectiveness of the Registration of Technology Introduction and Equipment Import" issued by MOFTEC or its branches have to be examined shall be amended to that the 風Approval Document of the Joint Venture Contract" and 風Approval Certificates of FFEs" have to be examined instead. Other certificates specified in the Notices for examination remain unchanged.

2. Whereas the notices rule that for selling and paying forex on strength of the technology introduction contracts as attachments of the joint venture contracts approved before the issuing of this Notices, statements in the Notices that 風Certificates Certifying the Effectiveness of the Registration of Technology Introduction and Equipment Import Contracts" issued by MOFTEC or its branches have to be examined shall be amended to such effect that the 風Approval Documents of the Joint Venture Contracts", the 風Confirmation Letters" and 風Approval Certificates of FFEs" have to be examined instead. Other certificates specified in the Notices for examinations remain unchanged.
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China's tungsten industry is to control production and exports this year, deputy director of the State Non-ferrous Metals Industry Bureau Guo Shengkun said recently. Tungsten, a rare metal, is widely used in the military, electronics, metallurgical and oil sectors. The move is designed to enhance prices and industrial profits. More small tungsten mines and enterprises are expected to be merged or closed this year. The industry plans to establish some large tungsten enterprise groups, which will sharpen their competitive edges on the international market. They are expected to manufacture more high-end tungsten products.

Currently, there are more than 600 tungsten mines and manufacturers across the country. Most of them are small concerns that waste resources and cause pollution. Enterprises will be required to gain licenses from the Ministry of Foreign Trade and Economic Cooperation to export tungsten products. The Ministry is expected to implement a quota system on the exports this year and efforts will be beefed up to crack down on tungsten product smuggling. Exports of tungsten concentrate will be banned. The industry will encourage exports of products with high added-value to earn more profits.

According to some industrial experts the total tungsten exports will be limited to under 10,000 tons annually for the next two to four years to stabilize the prices on the international market. This will help save the country's tungsten resources and raise industrial efficiency. China is the world's largest tungsten provider, and its exports directly affect fluctuations on the international market. The self-discipline mechanism involved in pricing tungsten is expected to be formally set up to prevent price wars on the domestic and international markets. The mechanism has already succeeded in curbing the vicious competition between tungsten enterprises in recent months. The price war could be largely attributed to excessive tungsten production The tungsten output of China amounted to 22,000 tons in 1998, accounting for 71% of global demand. Enterprises exported large amounts of tungsten, leading to price slump on the international market.
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Sun Zhenyu, Vice-Minister of Foreign Trade and Economic Cooperation (MOFTEC), said that a series of recently promulgated or soon promulgated new policies and measures will create a huge space for overseas investment in China. The policies and measures will be as follows:

1. Foreign business persons are encouraged to take part in reform and transformation of State-owned enterprises (SOEs) through various kind of investment in China. In the coming months, attracting foreign investment to promote the reform and restructure of SOEs will be one of the most important measures for the reform and development of the enterprises.

2. Implement the strategy of developing the western part of the country, improve the regional distribution of overseas investment and make efforts to provide a better environment for overseas investors to take part in the development of western China. To this end, the government will strengthen support through a series of policies.

3. Overseas investment is encouraged to take part in technological development and innovation. China encourages multinational companies to set up research and development centers in the country, encourages overseas business persons to participate in industrialization of the Chinese high-techs and in technical transformation of the Chinese traditional industries and, therefore, offers preferential treatment towards overseas transference of advanced and applicable techniques to China, and exempts duties and addedvalue taxes for the imports of Chinese-government-encouraged technologies and equipment.

4. Overseas investment is encouraged to participate in China's infrastructure construction which is considered as a major domain for soliciting overseas investment. China has planned to build 1,000-km urban railways and nearly 30,000-km express highways in the coming years. In the next ten years, over 100 million rural people will become urban population in small and medium-sized cities. Besides, there will be extensive room for the cooperation between overseas investors and China in transformation of old urban areas, housing construction and construction of small and medium-sized cities.

5. China is expected to open more fields to the outside world including a step by step opening of the service trade and other competitive sectors. Besides the current areas for pilot trials, retail-sale enterprises in all the provincial capital cities, all municipalities under the jurisdiction of the central government and all special economic zones will be opened to foreign investors. According to the promise of China in the negotiations for the entry of WTO, the country will gradually allow more overseas investment in the wholesale sector, give greater scope for the operation of foreign investment companies created by multinationals in China, increase the business scope and number of pilot trials of foreign-funded foreign-trade enterprises in China, expand pilot trials for foreign-funded intermediate service units such as accountant offices, appraisal organs, supervision companies and legal consultation companies. Besides, overseas investment will be cautiously allowed to enter the field of mining Chinese mineral resources.

6. Improve investment environment so as to help existing foreign-funded enterprises in China to consolidate and deepen their achievements. The government decided recently to simplify the procedures and speed up the process for approval of foreign-funded projects and for establishment of foreign-funded enterprises. The scope of mandatory valuation of imported equipment of foreign-funded enterprises will be gradually narrowed while the method for the valuation will be improved and the valuation of imported equipment of foreign enterprises will be canceled. Abnormal charges to, checking up on and expenses-sharing by foreign-funded enterprises will be firmly stopped.

At present, MOFTEC is working together with other ministries and departments concerned under the State Council to overhaul the policies and regulations on foreign-funded enterprises and readjust as soon as possible those policies and regulations impeding soliciting overseas investment and perfect the legal system for overseas investment.
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Encouraged by the economic growth that exceeded their targets last year, South China's Guangdong Province vows to continue its steady and effective growth this year by creating a solid foundation for foreign trade, science, education and high-tech. Guangdong succeeded in increasing in 1999 its gross domestic product (GDP), fixed asset investment and the total retail volume of consumption commodities by 9.4%, 11.9% and 14% respectively to 845.95 billion yuan ($101.9 billion), 298.5 billion yuan ($35.96 billion) and 365.6 billion yuan ($44 billion). The economic growth rate is set to be 8.5% this year.

Last year, Guangdong did well in foreign trade and investment. The province achieved better results than targeted. Guangdong continues to be the top in the nation in terms of imports, exports and actual foreign investment. Customs statistics showed that last year, Guangdong reached $140.35 billion in total foreign trade volume, up 8.1% than in 1998. Exports increased 2.7% to $77.68 billion, making up 39.9% of the national amount. This positive growth contributes tremendously to the balance of China's foreign trade as a whole. Private enterprises had the highest export growth, up 233.3% in 1999 than a year earlier. Exports to the United States, European Union and ASEAN increased respectively by 9.2%, 9.1% and 7.7%t to $20.22 billion, $10.91 billion and $3.38 billion. But markets in Hong Kong and Japan continued to shrink a little by 0.5% and 2%t respectively. Last year, yearly actual overseas direct investment in the province also hit a record $12.2 billion. The province has witnessed a 1.5% yearly growth in this sector. More investment came from Europe, the United States and Japan, up 15.3%, while less came from Hong Kong, Macao and Taiwan, down 8.1%. Overseas invested enterprises continued to play the leading role in the province's exports, totaling $39.4 billion in their export volume accounting for 50.7% of the provincial amount. Last year, about 14,800 contracts were signed attracting $8.716 billion in foreign investment, a 29.6% drop in value.

To achieve an 8.5% economic growth rate, Guangdong will try to expand the demand for both investment and consumption. The province will increase its fixed-assets investments to 322.4 billion yuan ($38.8 billion) this year, an increase of 8% compared to that of last year. Investment will be enhanced in infrastructural projects for water conservancy, highways, airports, and urban construction, and for power grid, energy, communications and urban infrastructures. 43 major construction projects will be undertaken this year which will absorb about 25 billion yuan ($3 billion). Part of the investment will come from the central government, domestic banks and national bond funds. Other channels will be explored to obtain investment needed to complete the programs. The province will concentrate on adjusting its foreign investment structure and making the most rational and effective use of foreign investment. Strict controls will be used to supervise overseas loans and foreign investors are encouraged to invest directly in projects.

Guangdong will help get most of the SOEs out of financial difficulty this year, the last in China's three-year campaign of SOE reform. The province also plans to optimize the industrial structure by relying on scientific and technological innovations and education. For the first time, the information industry is listed as the leading industry in the future of Guangdong.
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Shaanxi, the inland northwestern province, has decided to speed up its slow economic growth by setting a goal to increase its gross domestic product (GDP) by 9% this year with the help of the central government to compete with other fast-developing coastal areas. The expected target of economic development in Shaanxi in 2000 is that the GDP will increase to 165 billion yuan ($19.88 billion), 9% more than in 1999, and the local financial income will be 11.2 billion yuan ($1.35 billion), according to Cheng Andong, governor of Shaanxi. The central government's decision to put West China on top of its economic development list this year will give Shaanxi the opportunity to catch up with the richer eastern coastal provinces. Shaanxi has witnessed more foreign-funded enterprises set up by foreign business men. The province registered 148 overseas-funded enterprises in 1999, with investment totaling $730 million. The number of solely foreign-funded enterprises increased by 1.2% over 1998.

This year Shaanxi will invest 73 billion yuan ($8.8 billion) in the construction of basic facilities. The projects include improving agricultural production, building railways and highways, upgrading basic urban facilities, developing high-tech projects, and constructing tourist facilities. Approximately 125 projects are planned for this year, including spending 3 billion yuan ($360 million) to build water supply projects in 13 cities. Shaanxi's power in scientific research, national defense, tourism and fruit production industries are among the best in the country and it will focus its efforts to translate these advantages into better economic performance in the century. Shaanxi, with world-renown terra-cotta warriors and horses and thousands of ancient tombs, ruins and buildings, is one of the most attractive destinations for overseas and domestic tourists. In 2000, Shaanxi plans to receive 700,000 overseas tourists and 27 million domestic visitors, with expected profits of $280 million and 10 billion yuan ($1.204 billion) respectively. In 1999, Shaanxi received more than 630,000 overseas tourists with a total income of $270 million, an increase of 16.6% and 10% over the previous year.

Investors and enterprises from both abroad and the coastal areas of China have recently started to pay attention to Shaanxi Province, especially the strategically important Guanzhong Prefecture. The recent fair inviting investment in Xianyang city urban facilities, another central city in the Guanzhong Prefecture of Shaanxi province, attracted many customers from both home and abroad. Amongst the participants were senior policy makers from 11 investment companies and financial institutions based in the United States, Canada and Hong Kong. 28 projects with a total value of RMB 3.05 billion were contracted during the fair. Yangling is the first Pace-Setting New and High-Technology Agricultural Zone in China. The Sixth Yangling Agricultural New and High-Technology Fair, which closed recently, attracted many domestic and foreign experts. More than 700,000 people visited the fair and the business volume reached RMB 1.719 billion. The 2000 China East-West Cooperation and Investment Fair, an annual promotion for development, will run April 5-9 in Xi'an, the capital of Shaanxi Province. More than 2,000 projects will be up for grabs. They cover: high-tech industrialization, infrastructure, natural resource processing, agriculture, environmental protection and tourism. The central government is using this fair to advance its goal of speeding up economic growth in the west.
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Shenyang is an especially large-sized economic center. Covering an area of 12,980 square kilometers, Shenyang ranks fifth in comprehensive economic strength among all of China's cities. The city has changed remarkably in the past 50 years and its economic strength has been obviously enhanced. The huge national emblem on Beijing's Tian'anmen Gate was made by Shenyang. Through 50 years of construction and development, its gross domestic product increased to 94.1 billion yuan ($11.4 billion) in 1998. During the past 50 years, Shenyang has turned over 43.1 billion yuan ($5.2 billion) of profits and taxes to the State, corresponding to more than five times that of the State investment at the same time. In addition, Shenyang made more than 100 firsts in industry production in the country. For example, the first jet plane, the first high precision machine tool, the first set of huge-capacity transformer and the first submarine robot. A historical turnabout has been made in Shenyan's economic structure and it is among 53 other cities that can claim to have the most competitive capacities in the world. Judging from the ownership system, State-owned enterprises accounted for 90% and the remainder were collectively owned in the past, but now, private-run enterprises account for 42%.

Great changes have taken place in Shenyang's city appearance. Now, Shenyang has become a big, modern and beautiful city with a rational layout and advanced facilities. Its urban area has reached 215 square kilometers. The highway mileage has reached 3,000 kilometers. The international aviation port has linked Shenyang with the rest of the world. The number of telephone users has reached 1.11 million with an installed capacity of 1.52 million. Following are some of the projects the city offered for foreign cooperation.

1. Starter Sealed Battery. Introduce the technology of all-plastic labyrinth-sealed plug lead-acid battery from CEAC and make main equipment. Investment: 100 million yuan ($12 million). Form: Joint venture and cooperation.

2. Compressors with top level of 1990s. Introduce the running gear technique of large reciprocating compressors of 80-ton and 125-ton piston force, purchase more than 10 sets of equipment such as large scale crankshaft grinding machine and floor type NC boring and milling machine, and expand the machining and assembly workshop building by 4,509 square meters, to add 17 sets of inspection equipment and to supplement electric power by 3,105 KVA. Investment: 179.79 million yuan ($21.66 million). Form: Joint venture and cooperation.

3. Production line of accelerator in wind-driven generating set. Design and produce accelerators. Investment: 30 million yuan ($3.6 million). Form: Joint venture.

4. Rock Drills. Import the advanced manufacturing and inspection technologies, introduce foreign management experience, and purchase part of key equipment. Investment: $20 million. Form: Joint venture.

5. Internal Combustion Engine. Technical improvement for internal combustion engine. Investment: $8 million. Form: Joint venture.

6. Precision castings of rotary compressor. Import a set of equipment from Denmark to be used for re-making, smelting and casting, build workshops with floor-space of 648 square meters, power substation with 110 square meters and other supporting facilities, with an annual production capability of 100 million units. Investment: 51 million yuan. ($6.14 million). Form: Joint venture.

7. Hydraulic equipment. Content: Introduce technology, restore key equipment, with focus on high pressure gear pump, automobile steering pump and fluid clutch. Investment: 5 million yuan ($588,000). Form: Joint venture and cooperation.

8. Packing and agricultural machines. Produce packing machines and agricultural machines Investment: $3 million. Form: Joint venture and cooperation.

9. Thin-wall casting. Technical transformation of casting line. Investment: $2 million. Form: Joint venture.

10. Assembly of automobile clutch. Set up a press production line, build press workshops, purchase five large scale presses, 14 other presses, 33 sets of equipment of machining, assembly and heat treat, six checking machines and one machine for CAD development and enterprise electronic management. Investment: $13 million. Form: Joint venture.(to be continued)
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China plans to build about the same length of highways in the year 2000 as in 1999 and stress of the new year will be put on the western part of the country. Li Juchang, Minister of the Ministry of Communications also discloses investment will be increased in infrastructure projects including highways to keep the latter's construction scale as the same as last year. Emphasis of the construction will still be put on the schedules three sections on two north-south and two east-west trunk national highways and key highway projects as scheduled by localities. To implement the strategy of the central government to develop western part of the country, arrangements and investments to highway projects will be shifted to western regions in 2000. At present, the Ministry is speeding up planning for the development of transportation in the western part with preparing works on the move for key projects to pave the way for the overall development of the western areas. Local transportation departments are working on their own plans according to requirements of the Ministry.

According to Li, the Ministry planned to invest RMB 180 billion in highway construction in 1999. There were a total of 266 key highway projects arranged for 1999 under a planned total investment of RMB 83.5 billion for the first 11 months of 1999, accounting for 84% of the annual plan. Included were five north-west and seven east-west trunk national highways, which used RMB57.8 billion during the January-November period of 1999 fulfilling the annual plan by 83%. Included were the key sections of the two north-west and two east-west trunk national highways, which used RMB 45.1 billion accounting for 85 % of the annual plan. By the end of 1999, China's total length of highways reached 1.31 million km including 11,000 km expressways.

The government has decided to accelerate the construction of eight trans-provincial roads in the country's vast western region. The roads will link: 1. Lanzhou of Gansu Province with Mohan of Yunnan Province. 2. Baotou of the Inner Mongolia Autonomous Region with Beihai of the Guangxi Zhuang Autonomous Region. 3. Yinchuan of the Ningxia Hui Autonomous Region with Wuhan of Hubei Province. 4. Xi'an of Shaanxi Province with Hefei of Anhui Province. 5. Changsha of Hunan Province with Chongqing. For the Northwest, the government is considering to construct roads linking: 1. Altay with Hongqilapu in the Xinjiang Uygur Autonomous Region. 2. Xining of Qinghai Province with Korla of Xinjiang. 3. Chengdu of Sichuan Province with Zhangmu of Tibet. In addition to eight roads in the region, a skeleton communication network will be established during the 10th Five-Year Plan (2001-05) period.
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The Mianyang National New and High Tech Industrial Development Zone (MNN/HTIDZ), set up in November 1992, is one of the two national development zones supported by Sichuan province for their development. Propped up by the electronic information industry, the zone embodies an industry integrating optic, mechanic and electrical devices, fine chemicals industry, new materials industry, brewing and fermenting industry, and new and high-tech agriculture. A total of 392 industrial enterprises, of which 46 are from foreign businesses, have established their presence there. At present the zone's total incomes from technology, industry, and trade have reached RMB 13.45 billion and its total industrial output stood at RMB 34.8 billion.

The zone lies on the west tip of Mianyang City. It is only an hour ride away from the Chengdu City. The N/H tech zone has a total area of 40 sq km and has invested a total of RMB 1.8 billion in infrastructure and RMB 250 million in utility facilities. Such infrastructures as water, electricity, gas, sewage, communications, cable TV, and computer networks have also been primarily completed in the zone.

Mianyang boasts of solid science and technology and human resources advantages. There are 36 large, medium-sized and small science and research institutions supplemented with more than 90 non-independent research entities. It has 14 members from the Chinese Science Academy and China Engineering Academy and more than 1,000 science and technology results granted with provincial or ministry level or above rewards. Some of them have even won international awards and maintained leading position in the world.

Mianyang is a new industrial city and has rather complete industrial structure, with electronics, machinery, metallurgy, chemicals, building materials, and textiles as its pillar industries. Electronics form one of its advantageous industries, with a number of famous enterprises such as the Changhong Household Electric Appliances, the Hushan Acoustics, the Jiuzhou Ground Satellite Station for Cable TV Systems, the Huafeng Connectors. As one of the best production bases in West China, Mianyang has been an important electronic city in the country for a number of years in a row, next only to Shenzhen. In 1996 the Changhong Company invested more than RMB 3 billion to build the Changhong Industrial Park and in 1998 the company's sales income generated from new and high-tech products reached RMB 12.1 billion, accounting for 86.6% in its total. Meanwhile, many famous enterprises from both home and abroad have come to invest in the zone.
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China's sanitary ceramic ware industry is facing structural supply difficulties. The main problem is that production of low-class sanitary ceramics exceeds demand while the industry's enterprises are unable to meet demand for high-grade products. Industry experts said that output of high-grade sanitary ceramics only accounted for 10-15% of the total. Output of sanitary ceramics totaled 54-55 million pieces in 1997. But demand in 1998 was only 30 million pieces, with the demand for high-grade products accounting for 20%. Experts predict that demand for sanitary ceramics will rise in the next few years as the Chinese Government takes measures to stimulate the real estate market.

But demand this year will not grow much since it will take some time for the economy to see the effects of the government's action, especially in sectors such as the building materials sector. The industry authority has set a goal of increasing output of high-grade sanitary ceramics to 25% of the total by 2000. It is also expected to eliminate part of the production capacity of low-class products. The oversupply in the medium and low-grade sanitary ceramics sector has contributed to a price war, which has slashed profit margins. Some sanitary ceramic manufacturers make inferior products in order to try and balance income and expenditure, which has hampered the healthy progress of the industry. There are 400 enterprises producing sanitary ceramics across the country, one-fourth of which are funded by foreign investment. In the first quarter last year, China exported 459,161 pieces of sanitary ceramics worth $5.88 million, up 18.5% and 71.6% respectively over the previous year.
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General Electric (GE) announced recently that it will produce its latest model of helical CT scanners in Beijing beginning this year. Its Beijing joint venture, GE Hangwei Medical Systems Co Ltd, will produce 500 epochal slipring helical CT scanners called CT ProSpreed Ai, 400 of which will be exported to the United States, Japan and Europe. GE will also transfer its research, development and production technology for the new CT model from the United States and Japan to Beijing, said Chih Chen, president of GE Medical System China. The move will make China one of the world's top five CT manufacturers in 2000. The other four are the United States, Japan, Germany and Israel.
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Panda Electronics Group and Ericsson China recently unveiled the first jointly produced mobile phone that carries a local brand name. The two-way Panda GM518, modeled after Ericsson's hand-set, is designed to attract lower-income Chinese consumers. The release of the Panda mobile phone is a result of the two companies' joint venture, Nanjing Ericsson Panda Mobile Terminal Corp. It also reflects the government-motivated strategy of localizing the production of mobile telecommunications systems. The two companies have established a research and development center at the Nanjing joint venture, utilizing Ericsson's technology expertise to develop a series of Panda models for the Chinese market. The cooperation will be intensified in the coming years, ranging from research and development to production and marketing. Panda developed the country's first locally made mobile phone with analog mobile system and GSM system in 1992 and 1996, respectively. But since it lacked sufficient technological expertise and large-scale production, the two hand-sets sank in China's foreign-brand-dominated mobile-phone market. The Nanjing company plans to reach an output volume of 700,000 hand-sets in 2000 and 1.5 million in the following year.
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Siemens Corp has a strong interest in Beijing's urban transportation construction, the subway system and light railways in particular. Beijing is now focusing on connecting the downtown area with residential areas in the northern part of the city. Siemens plans to establish a research and development center in Beijing. The corp is willing to provide technological support to Beijing's transportation system, electricity supply, and environmental-friendly projects.
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Guangzhou Automobile Group, the Japan-based Isuzu Corp, and Isuzu (China) Holdings Co Ltd signed an agreement on January 21, involving a joint project to manufacture Isuzu bus series. Total investment for the project will top $30 million, of which Guangzhou Automobile Group will contribute 51%; Isuzu Corp, 25%; and Isuzu (China) Holdings Co Ltd, 24%. The agreement covers 20 years. The new project will use Isuzu's most popular bus designs and its latest auto technologies to revamp Guangzhou Automobile Group's Guangzhou Bus Factory. The new project will focus on production of the Isuzu Gala series of buses, including Isuzu Gala Super Hi-Decker buses, Gala Grace Hi-Decker Buses, Gala Mio buses and LT133 buses. The project will be operational in 12 months and is expected to turn out 1,200 buses annually at the initial stage.
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