Access to import and export rights will be easier for Chinese businesses in the near future as the government speeds up its reform of the foreign trade management system in light of Chnia¬šs pending membership to the World Trade Organization. Sources from the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) said most enterprises will be able to obtain direct foreign trade rights without having to get permission from MOFTEC.

The State started to apply the registration system to manufacturing enterprises in the five special economic zones in 1996. Under the registration system, enterprises only need to register at MOFTEC before doing foreign trade business, instead of filing applications and waiting for approval. The scope has since been expanded to nationwide State enterprises, State and collectively owned research institutes and high-tech enterprises. The incentive has given a shot in the arm to China¬šs export sector, especially when it was trapped in the fallout of the Asian financial turmoil.

So far, only retail and wholesale businesses as well as private enterprises are requested to apply for approval from MOFTEC before they are able to do direct import and export business. MOFTEC sources said that further deregulation will be made as China moves closer to being accepted into the WTO. MOFTEC statistics revealed that by the end of 1999, a total of 29,258 enterprises had been given import and export rights, among which 6,294 were newly added in 1999.
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Guangzhou, the provincial capital of Guangdong Province, has been selected as the site, as part of an experiment, for foreign banks to do business in Chinese currency. Zhang Guanghua, deputy head of Guangzhou Branch of the People¬šs Bank of China (PBOC) said the move will help speed up the opening of the financial sector in South China. As a policy-making bank, PBOC operates nine branches to oversee financial businesses and step-up macro management of foreign banks that deal in renminbi. PBOC Guangzhou Branch oversees financial businesses in Guangdong Province, the neighboring Guangxi Zhuang Autonomous Region and Hainan Province. Currently in South China, only selected foreign banks in Shenzhen, a special economic zone in Guangdong, have got permission to do renminbi business.

Zhang pledged recently that his branch would do more to attract foreign banks to South China by giving them preferential treatment. He urged that greater efforts be made to increase agent business among banks from Guangdong, Hong Kong and Macao and to speed up the development of cheque settlement in Hong Kong dollars in Guangdong and Hong Kong. Management over border trade settlements with Viet Nam also will be improved. South China has 58 overseas financial organizations, accounting for one-third of the country¬šs total. The amount of hard currency deposits and loan grants with these overseas financial and banking organizations makes up 4.5% and 21.1% of the corresponding total in South China hard currency market. Meanwhile, Chinese banks in South China have established agent business ties with well over 5,000 banking organizations from 140 countries and regions.

South China ranks first in the country in terms of the amount of deposits and loans granted in both Chinese and foreign hard currencies, and for the number of financial organizations. By late 1999, the sum of deposits in Chinese currency in banks in Guangdong, Guangxi and Hainan climbed to 1,786.1 billion yuan ($215.71 billion), accounting for 16.4% of the country¬šs total, and the amount of outstanding loans stood at 1,337.5 billion yuan ($161.54 billion), making up 14.3% of the overall figure.

PBOC licensed on March 3 seven foreign banks to conduct renminbi operations in China. Five foreign banks--one from Australia, two from South Korea, one each from Japan and Germany--were permitted to deal in renminbi business in Shanghai. Two Japanese banks were approved to do renminbi business in Shenzhen. The move is another step in the nations gradual opening up of its financial industry. PBOC¬šs approval brought the number of foreign banks licensed to conduct renminbi business in China to 32. 24 are in Shanghai and 8 are in Shenzhen. By the end of 1999, the total assets of foreign banks in China were valued at $31.8 billion. Total local currency lendings were 6.7 billion yuan ($807 million). Central bank Governor Dai Xianglong has acknowledged that China will give foreign banks equal treatment, which means the complete opening of the banking industry, after China¬šs likely entry into the WTO. The domestic banking industry is now preparing for foreign competition by reducing non-performing loan ratios, merging and seeking funds via the stock market.
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Investors in Beijing are expected to benefit from additional tariff cuts and exemptions, according to Beijing Customs officials. The purpose of the favorable policy is to open the capital market wider to foreign investment, to introduce more advanced technologies and equipment into China and to increase high-tech production capacity. In accordance with the adjustment of macroeconomic policy, tariffs on imports have decreased from 42% in 1992 to 16.44%. This is expected to encourage stronger high-tech related imports. The capital¬šs preferential policy, promulgated last year, applies to foreign-funded firms engaged in research and development, R&D centers, high technology development and exports, and has already benefited foreign investors with favorable tariff cuts on imports of their capital goods.

Starting from this year, foreign investors will enjoy tariff and import-related tax exemptions for imports of equipment, machinery parts and technologies by using their reserves, funds for reproduction and depreciation and post-tax profits. These imports must be earmarked for technological innovations of foreign-funded projects. Aimed at optimizing the import structure, the policy was actively used last year. Imports of foreign-invested enterprises increased 29.9% to $3.66 billion, accounting for 70.7% of the city¬šs total import volume. The growth rate hit 30% on a month-to-month basis in 1999.

However, because of the foreigners¬š confusion with policies and imperfect services, there are many problems that need to be resolved. Making clear the preferential involvement, improving work efficiency and providing consulting services are primary tasks for the Beijing Customs. This year, investors may get a note about tax-exemption categories concerning imported goods as soon as they apply for a joint venture registration. This could help with business decisions. Beijing Customs has pledged to ease registration times to 5 working days and to rule on tariff-exemptions or tariff-cuts within 3 days, as a general practice. The city will pay more attention to providing policy references in a timely and accurate manner to foreign investors and improve advisory services.
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The People¬šs Bank of China and the China Securities Regulatory Commission issued on February 13 a procedure on the management of stock hypothecation by securities firms, allowing qualified securities firms to borrow money from commercial banks by hypothecating the stocks they hold. The procedure requires that the collateral security must be A shares and shares in securities investment fund listed on the domestic stock markets. The borrowers must be head offices of securities firms while the creditors are State-owned commercial banks, their authorized branches or the head office of other commercial banks.

The procedure also requires that the outstanding term of the capital borrowed through stock hypothecation is six months at most. The amount of the loan should not exceed 60% of the market value of the stocks being hypothecated. The procedure also includes provisions on the qualification of the borrower and the creditor.
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China has launched a nationwide 'Remake the West Campaign". According to Zeng Peiyan, State Development Planning Commission minister, the government is poised to pour 70% of this year¬šs fixed asset investments and foreign loans into developing the western hinterlands. The State will launch 10 major development projects to kick off its ambitious campaign of developing the West. The projected investment for the West, up 60% from last year when investments reached 2.99 trillion yuan ($361 billion), is mainly earmarked for improving the infrastructure of the region. Airports, highways and railroads that would link with national transportation networks, and water conser-vancy projects in the landlocked west will be the top priority projects getting investment funds. Government departments are preparing to kick off five long-term projects, including a natural gas pipeline that will snake across the West to the energy-guzzling East Coast.

Although the government put the development of the West at the top of its agenda, the central region will benefit much from the 'Remake the West Campaign" because of the rise in demand and consumption that is expected. Moreover, the priority being given to the West will not hurt eastern regions because coastal development will hinge on 'breakthroughs" in technological innovations. Market rules rather than political interference will lead the way in the government¬šs crusade to revive the West. Favorable policies for foreign investors and domestic investors are also in the pipeline. Among the most generous terms being contemplated is offering free land to entrepreneurs, especially in the poorest of poor areas.

China recently promulgated a new package of preferential policies to further encourage foreign investment in its western and central regions. These preferences together with the old ones of the same nature form a framework of preferential policies related to encouraging foreign investment in western and central regions. A cross section of the framework can be seen as:

1. Permitting each province, municipality or autonomous region in central and western China to select an existing development zone in its provincial capital to apply for establishment of State-class economic and technological development zone to enjoy such preferential taxation treatment as 15% income tax rate and 'reduction for three years and exemption for two years" of income tax. The State Council has recently approved moves to give seven development zones in central and western China national level status. The move is part of an incentive package to spark off the economy of the western and central regions. The seven Economic and Technological Development Zones are all located in capital cities of the central and western provinces: Hefei, Zhengzhou, Xi¬šan, Chengdu, Kunming, Changsha and Guiyang. The elevation of the seven development zones will allow the zones to offer more favorable policies to businesses investing in them.

2. Permitting FFEs which are encouraged by the State in central and western China to pay 15% income tax after the expiration of three years term general preferential policies. FFEs in the region will enjoy a 50% tax reduction for another three years if their annual export is confirmed to account for more than 70% of their total output value, with the lowest rate after the reduction standing at 10%.

3. Permitting provinces, municipalities and autonomous regions in central and western China to compile their own catalogues of advantageous industries and projects in using foreign investment upon approval by the State, for which the State policies granted to encouraging projects may be applied, and equipment and supporting technologies, parts and fittings which are unable to be produced domestically or the function of the domestically produced ones is unable to satisfy the demand imported by FFEs for the projects for their own use are exempted from the import duty and import involving tax.

4. Permitting projects reinvested by FFEs in central and western China with more than 25% foreign capital to enjoy treatments granted to FFEs and contract for operation and management of FFEs and domestic enterprises in central and western China by FFEs in the coastal areas as well as less restriction for absorbing foreign investment and setting up FFEs in central and western China.
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According to the report given to the National People¬šs Congress on March 6 by Zeng Peiyan, minister of the State Development Planning Commission, China¬šs economy is expected to grow at around 7% this year, almost the same as last year¬šs 7.1%. To attain that goal, the government will continue its proactive fiscal policy. This year¬šs focus will be on the expansion of investment and better investment structure, the restructuring of agriculture and industry, more effective use of monetary policies to support economic development and reform of the State-owned enterprises. China will continue to open wider to the world, while launching the full-scale campaign of developing its vast western regions. The government will also attach importance to sustainable development and quicken its pace in scientific and technological development.

Other targets outlined by Zeng are: 1. Total fixed assets investment is scheduled to increase by about 10%. 2. Total volume of import and export is planned to increase by 3% and the government deficit is expected to be 229.9 billion yuan ($27.7 billion). 3. Total volume of currency issued will be around 150 billion yuan ($18 billion). China¬šs GDP reached 8.2054 trillion yuan ($988.6 billion) last year. A number of industries such as textile, construction materials and railway transportation have started to write off the red already. National revenue increased by 15.2% over the year 1998 to reach 1.1377 trillion yuan ($137 billion) and China¬šs foreign exchange reserves amounted to $154.7 billion by the end of last year.
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Increases in prices of petroleum products on the world market are threatening the security of China¬šs oil supply. The threat has prompted an urgent adjustment of the country¬šs energy strategy. The world price of crude oil peaked at a nine-year record high of $30 per barrel in February, compared with only about $12 per barrel in April, 1998. Dramatic fluctuations in international crude oil prices negatively affected China because the country has become increasingly dependent on imported oil since 1993, when it became a net oil importer. China imported nearly 40 million tons of crude oil and oil products last year, or 20% of the country¬šs total consumption. China¬šs demand for crude oil is expected to grow at an annual rate of 4% during the 21st century. It expects to import 42 million tons of crude oil this year.

Experts said development of resources overseas, through the establishment of ventures in oil producing countries, is a better way for China to achieve a stable oil supply. China is considering creating a long-considered national strategic petroleum reserve to ensure its energy supply. The nation is expected to develop other energy resources, such as natural gas and hydropower to augment or replace its use of crude oil. As a crucial step in accelerating the development of West China, the State Development and Planning Commission will hold a special conference this month to plan the building of more pipelines to channel gas from West to East China.

A price surge on the international oil market has had a mixed effect on China¬šs petroleum and petrochemical sectors. Upstream oil exploration firms can benefit because they can sell their products at higher prices than before. However, high crude prices increase production costs for the country¬šs downstream refining and petrochemical enterprises, which have a small manufacturing capacity and will suffer in competition with foreign giant rivals. Consumers will have to spend more money to buy oil products. On February 20, the State Development and Planning Commission officially raised the floor price for gasoline and diesel by 50 yuan ($6.02) and 120 yuan ($14.46) per ton. Experts predicted prices will drop to an "optimum" level, about $20 per barrel, within coming months because major oil consumers, including the United States and other developed countries, will pressure OPEC to increase their output and sales. OPEC is expected to consider its production goals at a ministerial-level meeting scheduled for March 27.
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The economy of Liaoning Province, the country¬šs traditional heavy industrial center, grew steadily last year. Official statistics indicate that the province¬šs gross domestic product reached 413.5 billion yuan ($49.8 billion) in 1999, 8.1% more than 1998. Industrial output and market sales increased steadily, while fixed assets investment growth slowed. Industrial added-value reached 178.1 billion yuan ($21.46 billion), up 8.7% on a year-on-year basis, while retail sales increased by 7.1%. Industrial products with high-technology and high added value accomplished substantial output. Among such products are personal computers, which increased 59.3%; color TVs, which grew 34.4%; and household refrigerators, which were up 56%.

The province¬šs agricultural production grew steadily with the implementation of optimization, readjustment and diversification last year. Agricultural added-value reached 52 billion yuan ($6.27 billion), gaining 4.7% year on year. Although some areas suffered natural disasters last year, the province¬šs overall harvest situation was good. The total output of grain was 16.488 million tons. The growth of foreign trade, which topped $13.7 billion, is higher than the planed target made in early 1999. The total volume of exports increased to $8.2 billion, 1.9% higher than 1998, and ranked seventh in the nation. The products, especially the high-technology products made by joint ventures, have occupied about 60% of export commodities. Figures indicated that the province has signed contracts valued at $5.1 billion with foreign companies. And more than $3 billion in foreign capital has been secured.

Liaoning is home to nearly one-tenth of China¬šs large and medium-sized State-owned enterprises with total fixed assets of 500 billion yuan ($60.24 billion ). Its industrial structure is undergoing a transition and upgrading. To better position itself in the international market, the province needs capital, technology, talent and management expertise to accelerate the process of industrial upgrading. Liaoning is seeking cooperation with multinational corporations. The province looks for foreign involvement in the fields of machinery, metallurgy, petrochemicals and electronics. Last year, the province sent a delegation to the United States and Canada, and signed nine contracts and 39 letters of intent with foreign businesses. Liaoning plans to highlight its petrochemicals, in-depth processing, plastics, chemical fibers and fine processing. The metallurgy industry will invite foreign partners to produce special steel and other steel material badly needed on the international market, and household electronic appliances are also open to cooperative projects. Liaoning will continue to make themselves more accessible to the outside world in 2000. The province will spare no efforts in stepping up its foreign trade and cooperation.

State-owned enterprises (SOEs) also made new progress last year. The 60 key SOEs, which make up Liaoning¬šs industrial capacity, inked 41 projects with $120 million in foreign investment last year. Liaoning will continue to work with its foreign partners to enhance the local economy, especially the construction of economic and technological development zones. The output value from the Dalian Economic and Technological Development Zone grew to 28.5 billion yuan ($3.4 billion) in 1999. In addition, more than 60 enterprises¬š annual output value exceeded 100 million ($12.1 million). Besides, Liaoning will highlight its tourism industry and personnel training in order to stimulate the local economy. With $304 million in foreign exchange earned, the province has served 491,000 overseas sightseers last year, representing a 19.6% growth from 1998.
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The industrial output of East China¬šs Shandong Province in 1999 was 694 billion yuan ($83.6 billion), one-tenth of the nation¬šs total, placing the province third behind Guangdong and Jiangsu provinces. State-owned enterprises contributed 86 billion yuan ($10.4 billion), second after Shanghai. The productivity of State-owned and stock-based companies increased 97 billion yuan ($11.6 billion), up 10.85% from last year. Shandong has injected more than 200 billion yuan ($24.1 billion) to its fixed assets construction in 1999, 14% more than last year, which has enormously helped the province¬šs development. The additional State funds meant larger budgets for major areas such as transportation and water facilities. Robust performances by stock companies, rural industries and the production of goods such as Haier appliances, Changyu wine, HiSense electronic equipment and Double Star shoes contributed to the province¬šs upward industrial output. Shandong wants to reach a growth rate of 9% this year. Shandong Governor Li Chunting said the target can be met by reforming State-owned enterprises, optimizing economic structure and developing high-tech industries with a focus on upgrading 136 key sectors. Greater effort will also be made to accelerate the development of private businesses and underdeveloped areas.

The imports and exports of Shandong reached $18.27 billion last year, a 10% rise over the 1998 figure. The total includes $11.58 billion in exports, up 11.8% on a yearly basis, and $6.69 billion in imports, up 6.7%. Among the year¬šs exports, general trade was valued at $5.45 billion, up 18% from 1998 levels. The remaining $6.13 billion were from exports of goods manufactured with imported raw materials. Shandong¬šs exports to Asia grew by 15.5% year-on-year to $6.8 billion in 1999, the volume to the European Union rose 7.2% to $1.55 billion, while exports to the US rose by 10.4% to $2.24 billion.

Shandong has established a total of more than 20,000 overseas-funded enterprises during the past two decades. In 1999, the province received $3.3 billion in contractual foreign investment, up 10% over the previous year. More overseas capital will be sought for the province this year. Shandong will encourage multinationals to engage high-tech industries, the service trades, and infrastructure. In addition, other areas like finance, foreign trade, tourism, telecommunications, and transportation will be more open to multinationals. Shandong will implement a series of measures to create a favorable business environment for multinational investors. It will ban all administrative fees that are not approved by the State Council, the Ministry of Finance, the State Development Planning Commission, and the provincial government. A responsibility system will be established with which related government departments will handle complaints from overseas investors. Greater efforts will also be made to improve various overseas investment services in the province.
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The gross domestic product (GDP) growth rate of Shanghai¬šs Pudong New Area in 2000 will stay 5 or 6 percentage points higher than the city average. Pudong¬šs GDP rose 16% from 1998 to 80 billion yuan ($9.6 billion) last year, 20% of the city¬šs total. The growth rate is 6 percentage points higher than the city¬šs. The new area¬šs exports rose 25% from 1998 to $6.5 billion last year, one-third of the city¬šs total. Pudong is forecasting a 15% increase this year. Pudong¬šs retail sales rose 11% to 19.8 billion yuan ($2.4 billion) last year. The total is expected to hit 22 billion yuan this year.

Last year, Pudong added 470 overseas-funded enterprises--bringing the local total to 5,942--which have introduced $11.5 billion of contracted overseas investment. Of the world¬šs top 500 companies, 98 have come to invest in the area, and are engaged in the currently hot fields of property management, consultation, real estate, and market research. A total of $1.073 billion of contractual overseas money was introduced to Pudong last year, 38.5% of which was from overseas-backed enterprises. The United States was the leading overseas investor in Pudong last year with $266 million of contractual investment. It was followed by Japan with $134 million. The area aims to attract overseas investment of $800 million to $1 billion this year. Recent statistics show that 42 overseas banks have already opened their subsidiaries in the areas, with combined assets worth $13.31 billion. Apart from foreign currency transactions, 19 of the overseas-funded banks have been approved to engage in RMB business.

Some 300 large and medium-sized enterprises from all over China and nearly 6,000 overseas companies have established operations in the area. Businesses in Pudong are mainly engaged in auto, information technology, iron and steel, household electrical appliance, petrochemical and pharmaceutical industries. Pudong will continue to focus on fostering high-technology industry this year, and Zhangjiang, a high-technology industry development zone, will become the center.Often called China¬šs 'Medicine Valley," Zhangjiang has attracted many biomedical projects from large foreign firms like Swiss-based Roche. The area is also home to more than 20 software research projects. More than 50 industrial projects in the zone realized 4 billion yuan in revenue last year. The zone began construction of a 1-square-kilometer Technology Innovation Area last year, which will open to academic institutions this year, offering lower market rents. Local government will encourage more high-technology projects to settle in Zhangjiang in the near future. Revenue from high-technology projects in Zhangjiang and Pudong¬šs other special industrial zones, including the Waigaoqiao Free Trade Zone and the Jinqiao Export Processing Zone , accounted for 60% of the zone¬šs total revenue last year. The proportion is expected to reach 80% to 90% in three years. Pudong¬šs other two main tasks in 2000 are to work out an overall plan for the second decade of its development and to prepare for China¬šs entry into the WTO.
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Fuxin, located in the northwest part of Liaoning Province, is a prosperous city rich in history, natural resources and infrastructure. Fuxin has a continental monsoon climate with plenty of sunshine and four distinct seasons. According to relics unearthed, Fuxin¬šs history can be traced back 7,600 years, when people were first found living and working there. The Chahai primitive men¬šs village in Fuxin, which is the origin of Hongshan Culture, has been called the 'First Village of China." In the ruins of the village, the world¬šs oldest jade articles and China¬šs earliest stone-laid dragon designs were excavated. Fuxin is a beautiful and tidy city with perfect infrastructure. It has sufficient energy resources -- an ample supply of water, gas, heat and electricity. The city also has excellent transportation and modern communication services.

Fuxin¬šs rich natural resources offer a good environment and opportunities for investors. The largest gold mine is the newly built Paishanlou Gold Mine, which has the most modern facilities in China. It has a daily processing capacity of 1,800 tons of gold ore, producing 2,500 kilograms of gold annually. Fuxin¬šs fluoride stone is 26% of Liaoning Province¬šs total. Fluloride stone has a wide range of uses. The city is rich in reserves of non-metal minerals such as marble, limestone, gangue, asbestos and graphite. The city also has metal minerals such as iron, aluminum, silver, molybdenum, zinc, copper, tungsten and lithium. Rich reserves of high-quality agate stone and mineral water are available, as well. Fuxin has been dubbed 'a city of coal and electricity" because of its rich coal resources and well developed coal mining and coal power industries. In addition, Fuxin has established industries to build machines, make electronics, synthesize chemicals and produce textiles. Production of food, medicine and building materials also make up the city¬šs economy.

Fuxin is open to foreign investment. By the end of 1998, the city had signed 943 projects with foreign investments totaling 795 million yuan ($97 million). In 1998, Fuxin¬šs total value of exported goods reached 410 million yuan ($50 million). To speed up reforms and its openness to foreign investors, Fuxin has created a favorable environment for investors. The city offers special programs for large-scale investments and projects that feature high technology or large profits.

Projects initiated for overseas funds and cooperation.

1. Deep-processing of starch products. Import technologies and equipment. Investment: $15 million. Form: joint venture.

2. Production of noodles using buckwheat, maize and soybeans as raw materials. Import technologies and equipment and improve product quality. Investment: $8 million. Form: joint venture.

3. Production of sea-buckthorn oil, flavone, beverage and medicine. Import technologies. Investment: $13 million. Form: joint venture.

4. Production of automobile power steering pumps. Import technologies and equipment. Investment: $15 million. Form: joint venture.

5. Modern cable products for computer networks and cable TV. Import technologies and equipment. Investment: $9.64 million. Form: JV.

6. Production of capacitors. Import technologies and equipment. Investment: $8.43 million. Form: joint venture.

7. Production of specific drugs for gynecological and brain blood-vessel diseases. Import equipment. Investment: $2 million. Form: JV.

8. Production of fast food using pickled Chinese cabbage. Import equipment. Investment: $2.3 million. Form: joint venture.

9. Upgrade and expansion of beer production lines. Import technologies and equipment. Investment: $7.2 million. Form: joint venture.

10. Water supply project. Import technologies and equipment. Investment: $72 million. Form: joint venture.

11. Pollution-free garbage treatment and fertilizer production. Import technologies and equipment. Investment: $2.75 million. Form: JV.

12. Construction of a thermal-power station. Import technologies and equipment. Investment: $45 million. Form: JV.

13. Production of steel tubes with ceramic liners. Import technologies and equipment. Investment: $2.82 million. Form: JV.

14. Production of cellulose for food, animal feed and textiles. Import technologies and equipment. Investment: $2 million. Form: JV.

15. Production of 5,000 tons of alta-mud annually. Import technologies and equipment. Investment: $1.5 million. Form: JV.
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China plans to replace the use of timber with bamboo where possible, said Liu Hong, deputy director with the afforestation department of the State Forestry Bureau. Bamboo grows faster and produces a higher yield when compared with timber. It can be used as construction material, in papermaking, as food or in food preparations, furniture, packaging, for transportation and in the petrochemical sector. The plan is designed to offset a mounting shortage of timber on the Chinese market.

China is experiencing a shortage of timber because domestic demand has expanded with rapid economic growth in recent years, Demand is expected to increase by 440-540 million cubic meters in 2010. The government decided last August to ban timber cutting within the upper reaches of the Yantze and Yellow rivers to improve the regions¬š environment, which will also aggravate the shortage. The country¬šs annual timber shortfall has been about 38 million cubic meters in recent years. The shortage is expected to increase to more than 43 million cubic meters by 2010. To deal with the situation, the government has in recent year spent large amount of foreign exchange to import log and timber products. In 1999, imports reached about 21 million cubic meters in 1999, valued at more than $9 billion. However, with the start of licensing system on the world timber market, supply of timber in international market is getting stricter and stricter and followed by a sizable rise of prices on the market, making China feel more and more difficult to afford in foreign exchange.

To help alleviate the shortage, 1.2 million hectares of new bamboo production bases are expected to be established within next 15 years. They are expected to be located in 16 provinces and autonomous regions, including Fujian, Zhejiang, Jiangxi, Guangdong, Hunan and Yunnan provinces.

China abounds in bamboo resources ranking first in such resources in the world. It has bamboo forests of 4.2 million hectares comprising more than 400 varieties in 40 families, indicating broad prospects for development and utilization of such kind of materials. As a fast-growing and high-output plant, there is a broad prospect to use bamboo as a replacement of timber. Moreover, once planted, bamboo can continue to grow if properly cared and the material can be widely used in many areas. Every 60 bamboo poles can be used as 1 cu m of timber. The bamboo industry reported output valued at 17 billion yuan ($2.05 billion) last year with exports valued at $500 million. China¬šs bamboo products sell well in more than 30 countries or regions. An integrated system for bamboo research and development is expected to be set up, and the country will channel more investment into the bamboo industry. Annual bamboo output is expected to reach 30 billion yuan ($3.61 billion) by 2015. Exports will amount to $1 billion.
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Taizhou, in Zhejiang Province, has unveiled plans to put up to 10 of its businesses into China¬šs top 100 enterprises. It hopes to readjust its industrial structure and improve education in the next 10 years to meet the goal. The city will push its high-tech industries and improve the local investment system to achieve faster economic growth. In addition, it will focus on its social and cultural development. With 571 islets, three aquatic farms, four bays and 745 kilometers of coastlines, Taizhou is a unique integrated coastal city in East China. Encouraged by the local government, residents have raised funds to support the upgrading of infrastructures. Industry has developed around export businesses, energy development bases, ports and summer resorts. As the birthplace of China¬šs shareholding system in 1992, 86% of the city¬šs State-owned companies have been rejuvenated by diverse forms of ownership.

Last year the city held investment talk in Beijing. Over 500 investment projects were displayed for foreign businesses. These projects included 12 areas of expertise ranging from communication, tourism, water conservancy and agriculture to machinery, electronics, medicine and chemistry. Taizhou will try its best to create a satisfactory investment environment for foreign investors. Local government has worked out a series of preferential policies for foreign business. Taizhou¬šs economy has achieved rapid progress in recent years. By the end of last August, as many as 664 foreign-invested ventures had been established in the city which involved a total investment of $765 million.
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China¬šs machine builders will make more equipment, restructure themselves and expand their market. The restructuring of the machinery industry is not any temporary solution but a demand of the long-term development of the national economy, said Wu Xiaohua, director of the State Machine-Building Industry Bureau. China¬šs machine-building industry ranges from factory assembly lines to mining equipment and construction vehicles, consisting of 14 sectors, with more than 40,000 manufacturers turning out 60,000 varieties of products. The Bureau will support leading manufacturers in key industries and help some 50 giant companies. Domestic machinery manufacturers are now developing unevenly and will be challenged from abroad if China joins the World Trade Organization.

Power generation, petrochemicals, agricultural machinery, metal working and automobiles have already undergone market-rejuvenating overhauls. It is also important for machine builders to ally for change to push the growth of the whole industry and avoid redundant construction efforts and making unattractive or outdated equipment. The government is also ready to help machine builders. The Bureau is pushing for the exports of machinery and electronics. It will increase export quotas for these products, offer export credit services and give tax rebates for overseas sellers.

Meanwhile, Chinese machinery enterprises will improve manufacturing technology to expand market shares abroad. Enterprises are also encouraged to cooperate with big foreign companies to bolster exports. In this way, Chinese companies will get better technology and more access to the global market. From January to November last year, the total output value of the machine-building industry stood at 490.38 billion yuan ($59.1 billion), 12.32% up over the previous year. China¬šs machinery building industry is projected to get a total output value of 620 billion yuan ($74.7 billion) with a 9% growth rate this year.
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In a bid to expand its presence in China¬šs passenger car market, South Korea¬šs largest carmaker, Hyundai Motor Co, will pay $300 million to purchase a 20% stake in a three-year-old joint venture owned by affiliate Kia Motors Corp and China¬šs Jiangsu Yueda Group. The purchase, announced on January 26, will increase the combined Hyundai-Kia share of the venture to 50%. The rest is held by Yueda. Hyundai sees the great potential of China¬šs domestic sedan market, particularly the economy car market. The company is expected to inject $300 million into the venture. The new investment will triple the annual production capacity of the venture, Jiangsu Yueda-Kia Motors Co to 150,000 units in the next five years. In addition, the company may change its name to Jiangsu Yueda-Hyundai Motors Co. The joint venture is located in the city of Yancheng in Jiangsu Province. Last year, it started the production of a mini passenger car, modeled on Kia¬šs Pride. The new car is marketed under the Yueda-Kia name and is targeted at private buyers and businessmen.
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Nokia recently announced the official opening of a telecom system manufacturing base in Suzhou City in Jiangsu Province. The company said the move symbolizes the Finnish company¬šs strong commitment to the Chinese market. With a first-stage investment of more than $50 million, the Nokia (Suzhou) Telecommunications Co Ltd plant is expected to manufacture cellular network products including global system of mobile communications base stations and transmission products for Chinese and Asian customers. This is Nokia¬šs first wholly owned company in China. The company has opened seven joint ventures in China that produce mobile phones, network systems and other telecom products. The Suzhou plant, located in the Suzhou Industrial Park, where a number of the world¬šs leading companies have set up plants, began trial operations in 1998 and began making deliveries in January 1999.
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Motorola is one of the biggest sellers of mobile phones in China. It is also the biggest vendor of embedded chips in the world and in China. The company, predicting China will be the biggest market for one of the semiconductors it manufactures, will triple its investment in China in the next five years, a senior company official said. Motorola has already invested more than $1 billion here in the last 13 years and it will add at least $2 billion investment in the next five years. Motorola now operates two factories, in Tianjin and Shanghai, and one research and development center in Suzhou. Its Tianjin factory produces mobile handsets and semiconductors. The Shanghai plant focuses on production of pagers. The new investment will be put in all three items and in research.
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