China¬šs newly revised Marine Environmental Protection Law, which went into effect on April 1, aims to better control marine pollution and is expected to help the country expand its fishery industry, officials of the Ministry of Agriculture said. The law stipulates that a marine environment monitoring system should be established across the country. In addition, legal responsibilities for marine polluters are much more detailed. It also adds China¬šs commitment to and responsibility for international laws and regulations. The revised law is expected to meet the soaring demand of a sophisticated legal system for marine pollution control as the amount of pollutant discharged into seas has been increasing and the marine environment has been deteriorating. Since ocean and sea pollution depletes aquatic resources and endangers development of the fishery sector, a statute strengthening marine environmental conservation is absolutely necessary. China is facing an increasing number of marine environment_related problems, such as oil spillover accidents and red tides, which have impacted on residents¬š health and the sustainable development of the vast coastal regions. The Ministry has recorded an average of 80 contamination cases in China¬šs sea areas annually in recent years. Marine pollution has caused annual losses of 240,000 tons of aquatic products in the Yellow and Bohai seas, statistics indicated.

Compared with the 1982 version, the new marine code delegates the power of environmental protection in piscatorial waters and fishing ports to the fisheries bureau, which will also act as the supervisor and investigator of water pollution. The law will have a significant bearing on protecting fisheries resources and safeguarding the interests and rights of fishing firms. The Ministry¬šs Fisheries Bureau will map out detailed provisions regarding monitoring and protection of fisheries resources. It will also conduct environmental impact assessments of newly_built and expanded aquatic breeding farms. Supervision of various boats and ships in fishing ports will be stepped up to ensure that they have installed pollution prevention equipment and are not discharging effluents __ oil_containing water and daily sewage __ into seas. Fishery bureaus are also required to conduct studies of areas where oceanic natural reserves may be needed to protect special plants and ecology. When importing ocean plants and animals, scientific research and approval procedures are needed to protect China¬šs sea life.
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China¬šs Ministry of Communications (MOC) and the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) recently published the ­·Temporary Provision on the Examination and Approval of Wholly Foreign Owned Shipping Companies". Officials of MOC disclosed that the provision is promulgated in line with the Law of Foreign_Invested Enterprises of the People¬šs Republic of China and related shipping laws, and is designed to standardize the investment activities of foreign shipping companies in China, as well as safeguard their legitimate rights and interests. Ocean shipping agreements signed by the Chinese Government with governments of foreign countries and related legal documents are preconditions for opening wholly foreign owned shipping firms.

The provision stipulates that MOC and MOFTEC are in charge of examining and approving the establishment of wholly foreign owned shipping firms. Applicants must meet the following five basic requirements: 1. having over 15 years shipping experience; 2. having had permanent representative offices for at least three years in the port they intend to establish their company; 3. having at least one liner stopping over at the selected Chinese port once a month; 4. foreign shipping companies managing irregular shipping services have stable sources of goods supply in China; 5. having operated in China for two consecutive years without violating Chinese laws and rules and regulations. The provision regulates that the registering capital should be no less than ”ē1 million. The application procedures are as follows: potential applicants must submit their documents to the foreign trade departments in the provinces, regions or municipalities where they intend to open their firms. After the initial approval, their documents will be transferred to MOFTEC and MOC for final examination and approval. MOFTEC will issue an official and written reply, with which the applicants can get the ­·Certificate of Foreign_Invested Firms" or the ­·Certificate of Enterprises Funded by Taiwan, Hong Kong and Macao". Approved wholly foreign owned shipping companies and subcompanies are entitled to engage in the following businesses: to canvass business orders for shipping for their respective companies, to sign BL, to settle freight charges, and to sign service contracts.

The provision stipulates a wholly foreign owned shipping firm, which intends to open a subcompany in China, must meet the following four requirements before being allowed: 1. it has paid all the registered capital and operated for a full year; 2. at least one liner from the parent company has stopped over at the port where the intended subcompany will be opened; 3. the parent company has opened a permanent representative office in the selected city for over a year; 4. the parent company has operated for over a year in China without violating Chinese laws and rules and regulations. The provision also stipulates that in case of opening a subcompany, the wholly foreign owned shipping company should increase the registered capital by over ”ē120,000, and Chinese employees should make up over 85£„ of the work force.
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The central government is creating a new directory of industrial projects in the west authorized to accept foreign cooperative partners, their money and technologies. The State, in turn, will grant these qualified partners preferential tax incentives. The State Development Planning Commission (SDPC) and the State Economic and Trade Commission (SETC) are jointly working on the directory. Included in the directory are mainly agricultural and forestry businesses. The government will grant extra tax reductions to foreign_invested agricultural projects in West China, including reduced import tariffs, income taxes and financial levies for land use. Foreign_invested companies in East China, especially in the coastal areas, are now encouraged to invest in the west to expand their businesses in the Chinese market by relying on the comparatively low_costs of human resources. The government previously banned foreign_funded firms in East China from handling reinvestments in the Chinese market, except funds from profits reinvested in their own businesses in China.

Foreign_funded agricultural projects, if they meet the State¬šs current industrial guidelines for foreign investment, will get a 15£„ tax deduction from their income taxes in addition to the preferential tax treatment now given to the country¬šs foreign_funded joint ventures for their initial three years of operations. In some business fields, the government now strictly restricts the proportion of foreign investment in joint ventures with Chinese partners in East China. But, to promote development of the west, it will relax its restrictions to encourage foreign investors to go to west. The country is wrestling with how to ease investment in the west to achieve quick returns, while trying to avoid duplication in the establishment of new businesses at the same locations. SDPC stressed the importance of diversifying the channels of foreign investment flowing into the agriculture in the west for management upgrading, predicting that going onto international financial markets and being listed on the Shanghai and Shenzhen B_share markets will play a role in the region¬šs agricultural development. In 1999 alone, foreign investment in agriculture, and other sectors based on agriculture, amounted to ”ē1.5 billion, up 22.2£„ on a year_on_year basis, while total incoming foreign investment in the country dropped by 18.9£„.
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FFEs will also get the following preferences in land use:

1. They will have priority use of land when being included in overall land planning.

2. They will be encouraged to gain land_use rights through leasing and taking shares.

3. When obtaining land_use rights through administrative allocation, they need only hand in half the land_use fees stipulated by the State. They only need to hand in 5£„ of such fees when engaged in agriculture, forestry, infrastructure, environmental protection, education, science and research, and health.

4. They will be exempted from any land use fees when investing in Liangshan, Ganzim, Aba and Panzhihua. They will also be allowed to use the land free of charge when engaged in road, bridge, port, power station, mineral resources and airport facility investments or operations.

5. When engaged in the export of technology, they will be exempted from land use fees for three to five years. Firms which sell more than half of their products abroad are required to remit only half the land_use fees of the year after being approved. They will be exempted from three years of land_use fees when engaged in wet land development. They will be exempted from land use fees during the exploration of mineral resources.

FFEs invested in exploring mineral resources will have the following preferences:

1. They can establish limited companies or non_legal_person foreign_invested firms when engaged in risky explorations.

2. They can pay exploration fees before taxation within 10 years or within specified years after they begin business operations.

3. The compensation fees for mineral resources will be reduced when FFEs tap resources under water or large buildings, or retrieve mineral products through tailings.

4. FFEs can get some of the compensation fees for mineral resources when taping low_quality mineral resources or retrieving mineral products by utilizing internationally advanced technologies.

The policies will be suited for overseas Chinese and investors from Hong Kong, Macao and Taiwan.
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China will go after more foreign mineral resources while striving to attract more overseas funds for exploitation of the domestic market, newly appointed Land and Resources Minister Tian Fengshan said recently. Worldwide practices have proved that for a country producing and consuming huge amounts of resources, establishing an open supply system to make full use of domestic and foreign mineral resources might be the only way to secure its mineral supplies. According to the minister, besides directly purchasing certain mineral resources on the international market, Chinese enterprises also should become shareholders of foreign mines, run mineral joint ventures, or even prospect and establish solely_owned mines abroad.

The country is creating policies covering taxation, foreign trade, credit, and finance, as well as a special foundation, to encourage investment and exploration abroad. The focus will be on key inadequate resources in China such as oil, natural gas, high_grade iron, high_grade manganese, copper, bauxite, ferrochrome, and platinum. While developing countries in Asia, Latin America and Africa are the major choices for Chinese investors, developed countries containing rich mineral resources like the United States, Canada and Australia are also under consideration. As far as oil and natural gas are concerned, the country will step up its prospecting and exploiting efforts in Central Asia, Russia, the Middle East and Africa. As for those foreign mineral companies wanting to invest in China, they are welcome. They are encouraged to invest in mineral resources with a variety of uses requiring advanced technology. Foreign investors are also encouraged to cooperate with medium or large_scale Chinese mining enterprises. They can become shareholders of the State_owned mining enterprises or purchase prospecting and mining rights from them.
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China¬šs economic performance of the January_March period was better than expected. The country¬šs economy posted an encouraging 8.1£„ growth on a year_on_year basis during the first quarter, with all major economic indicators pointing to a sharp turnaround from last year¬šs declining trend. Industrial output expanded by 10.7£„; fixed assets investment advanced 8.5£„ and retail sales grew 10.4£„. Foreign trade stood at ”ē98.22 billion in the same period, up 40£„ on a yearly basis, with exports reaching ”ē51.72 billion, up 39.1£„. The country increased exports to all its major trade partners. China¬šs exports to the Republic of Korea, Japan, the Southeast Asian nations, EU and the US increased 57£„, 30.4£„, 41.5£„, 39.3£„ and 32.8£„, respectively. Those to HK, Russia and South Africa, were up 48.3£„, 76£„ and 72.5£„, respectively. Experts attributed to the government¬šs stimulus measures, specifically an expansive fiscal policy featuring massive spending on infrastructure. Quick recovery of the neighboring Asian economy, a booming US economy and a steadily growing European economy are also cited as reasons for China¬šs positive first quarter statistics.

However, domestic demand still remain weak, and deflationary pressure remains. In addition, the reform of state_owned enterprises, which is at the core of China¬šs economic reforms, is far being finished. While struggling to correct these problems, most of which came from the flaws of a planned economy system, state companies also have to face increasingly difficult external challenges. These challenges come mainly from China¬šs pending accession into the WTO and competition brought by the information_technology era.
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The inland province of Shaanxi, an eastern gate to China¬šs vast western hinterlands, plans to broaden that passageway, as part of the country¬šs ambitious West China development drive. Shaanxi¬šs plans now center on building a better network of roads, intent on turning Xi¬šan into a transportation hub. The province plans to complete construction of State roads through Shaanxi within 10 years, which will make it very convenient to go from east to west. Shaanxi will build 52,000 kilometers of new roads, including 3,074 kilometers of expressway. The ambitious project will cost 203 billion yuan (”ē24.5 billion). When the road project is completed, Xi¬šan will be within a 10_hour drive of most other major Chinese cities, including Beijing, Taiyuan, Zhengzhou, Chongqing and Chengdu. To complete the plan on time, the local government is looking at all possible funding sources.

In 1996, the province sold the management rights of the Xi¬šan_Lintong Highway to a Hong Kong company for 300 million yuan (”ē36 million), which was used for the construction of other roads. It has proven a good way to collect money and it plans to sell the management rights of other highways in the province. Provincial authorities will also seek loans from overseas financial organizations and foreign governments. Plus, the province will introduce advanced technology in road construction to help construction run more smoothly. The tunnel that¬šs now under construction on the Qinling Mountain highway is 18 kilometers long and is one of the most difficult tunnels in the world to build. In 2000, Shaanxi will invest 7 billion yuan (”ē840 million) to construct some 1,000 kilometers of road.

Shaanxi is undertaking an 8 billion yuan (”ē964 million) hydropower development program along the Hanjiang River, the largest tributary of the Yangtze. Five hydropower stations will be built along the Hanjiang River, and will bring the total annual power output along the river up to 7 billion kilowatt hours. There are currently two hydropower plants along the river, with a combined generating capacity of 1 million kw. The Hanjiang River originates in Hanzhong in central Shaanxi, and joins the Yangtze at Wuhan, capital of Central China¬šs Hubei Province. The ­·stored" hydropower capacity along the 700_kilometer tributary in Shaanxi is projected at 4.7 million kw, with the usable capacity reaching 2.8 million kw. So far, feasibility studies and preliminary designs for the five hydropower plants have been completed and are now awaiting departmental approval.
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Guizhou will try to capitalize on opportunities provided by the central government¬šs western development strategy to advance its economy, said Guo Shuqing, vice_governor of Guizhou Province. Such advances will be achieved through far_reaching reforms, larger investment in infrastructure and improvement of education. Occupying 176,000 square kilometers and home to 35.5 million people, Guizhou has abundant natural resources and splendid scenery, but the province¬šs overall economic development has been slow. The western development strategy, intended to invest in infrastructure and spur economic growth, has given Guizhou a chance to catch up with more developed regions.

Promoting change in the province¬šs state_owned enterprises is essential to its economic development. Official statistics show that 15 large state_owned enterprises (SOE) in Guizhou have been allowed to swap debt to equity, involving 10.25 billion yuan (”ē1.2 billion). In 1999, Guizhou¬šs SOEs turned 307 million yuan (”ē37 million) in net profits, up 300 million yuan from the previous year. Reforms in Guizhou¬šs investment and financing systems also fueled the province¬šs progress. The key to investment reforms is to ensure investment efficiency. The government will mainly be responsible for investment in infrastructure, education and cultural projects, and enterprises should seek financing opportunities mainly from markets. The reform of the tourism sector has also helped Guizhou¬šs economy, whose natural beauty has long attracted both Chinese and foreign travelers.

The China Development Bank plans to provide loan packages valued at 11.3 billion yuan (”ē1.3 billion) to Guizhou during the next two years. The loan will cover eight infrastructural projects of the province, including the construction of an expressway in Guiyang and two water reservoirs. The bank is also considering investment in the construction of the Jinyang New District, a satellite city of Guiyang, and in the local telecommunications industry. To better support the central government¬šs western initiative, the State Development Bank plans to set up a branch office in Guiyang. The State Development Bank has cooperated with Guizhou province on 70 programs involving investment valued at more than 11.8 billion yuan (”ē1.4 billion). To encourage investors, local government will try to create a sound investment climate and will offer promising returns to investors.
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This year Tianjin will offer more opportunities for overseas capital and speed up its pace in utilizing overseas investment in such sectors as finance, insurance, commerce, information and related service trade. The municipality will put forward a series of cooperative projects for overseas capital in 2000. These will include some projects utilizing new and high_tech research results, some infrastructure projects such as construction of railway tracks and docks, and zone_building projects, building export_oriented product processing zones, agricultural pace_setting zones, financial and commercial centers and European_style tourist zones. Furthermore, progress will be made to establish foreign trade Sino_foreign joint ventures in the city. Efforts will be made to carry out experiments in establishing Sino_foreign cooperative fund.

Measures will be taken to attract investment from small and medium_sized overseas companies. They will include setting up Tianjin Center for Small and Medium_Sized Overseas Enterprises. The center will provide investors with a complete set of services from market survey to post_establishment management. Some industrial estates especially for investment from small and medium_sized overseas enterprises and related industrial real estate management companies will be established. Great efforts will also be made to attract multinational corporations¬š research and development organizations. At present, preparations are being made to promulgate a series of preferential policies. The city will construct seven new ports, several ship locks and will rebuild eight wharves this year. Foreign funding is expected to be used in the projects and several multinational corporations are already preparing to invest in them. Local sources said the seven 10,000 dead_weight_ton docks will also be built this year.

Tianjin¬šs foreign trade and economic cooperation new objective is to create an international standard business environment and legal environment for overseas investors. Tianjin has already approved more than 12,000 foreign invested companies, with contracted foreign investment of ”ē25 billion. More than 200 multinationals have set up 300 operations in the city. The export value of high_tech products amounted to ”ē1.35 billion last year. That¬šs 23.8£„ of the city¬šs total exports. Under a government plan to promote the high_tech industry, high_tech products worth ”ē6.8 billion were produced last year. Besides, Tianjin has been expanding economic cooperation with foreign businesses as part of its globalization efforts. According to statistics, the city signed ”ē200 million worth of labor export contracts with foreign businesses last year, up more than 10£„ over 1998. At the same time, Tianjin invested more than ”ē13 million in 16 countries and regions last year, setting up 24 enterprises and agencies.
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The central government¬šs focus on the development of West China is already having an effect in Chengdu, capital of Southwest China¬šs Sichuan Province. The city will shift its industrial orientation from resource_intensive industries to high_tech pursuits. With 22 colleges and universities, and more than 450,000 technicians available, the city¬šs leaders consider it well_positioned to take advantage of the country¬šs high_tech potential. This strategy corresponds with the central government¬šs theory of letting some cities with a sound economic environment become better off first and set an example for the rest to follow. The city also realizes that talented people will be needed to ensure the city¬šs efforts succeed. City leaders have a plan to offer incentives to lure high_tech talents to Chengdu. Successful candidates in fields such as electronics and biomedicine will be granted permanent residential status in the city when they are responsible for bringing investment to the city. Start_up capital will be provided to some who want to establish new firms in the city.

Information technologies, engineering, medicine and food have become pillar industries in Chengdu. The Chengdu Economic and High_Tech Development Zone, located in the city¬šs Longquanyi District, has been formally designated a national grade development zone by the State Council. The city is planning to establish a technology exchange center, the largest in Southwest China, to speed the transfer of scientific developments to industrial use. The center will be responsible for technology trading. It is expected to offer consultations and legal services needed by enterprises which want to operate in the city. The establishment of the center is sure to boost the local economy and serve as a bridge between enterprises and scientific institutions. State_owned enterprises are in desperate need of new ideas and technologies to compete on domestic and world markets. Scientists and other developers of high technologies need enterprises to adopt and market them. The center would help bridge that gap.

Sichuan Province will host a five_day commodities fair and investment seminar in the provincial capital of Chengdu from May 29 to June 2. The fair and the investment seminar are part of Sichuan¬šs strategy to catch up, to forge new cooperative ties with both domestic and overseas enterprises, and to boost the economic development of the landlocked but resource_rich province. The commodities fair will highlight products of light industry, chemical industry, construction and decoration industry, agriculture, machinery industry and electronics industry, as well as medicines and medical equipment. The fair is expected to make the province¬šs brand names better known elsewhere, and to help outside enterprises realize the market potential of the province. The concurrent investment seminar aims to lure capital inputs for several of the province¬šs key projects. The province particularly encourages investors to participate in projects concerning infrastructure construction, environmental protection, agricultural development and adjustment, technological upgrading and manufacturing, reform of State_owned enterprises, tertiary industry, as well as projects that will help the development of ethnic regions. The province¬šs strengths, which include its tourism resources, its position as China¬šs key base for grain and by_product production and its large market, will make investment there promising and profitable. And the province¬šs favorable and flexible policies, and good services will also benefit investors.
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1. Production of soybean oil. Investment: ”ē7.19 million, with ”ē3.99 million from foreign investors.

2. Raising cows and dairy processing. Investment: ”ē16.7 million, with ”ē10 million from foreign investors.

3. Food production. Investment: ”ē6 million, with ”ē2.4 million from foreign investors.

4. Water conservation during irrigation. Investment: ”ē12 million, with ”ē3.4 million from foreign investors.

5. Cultivation of vegetables. Investment: ”ē1 million, all from foreign investors.

6. Soybean and livestock processing. Investment: ”ē19.5 million, with ”ē7.9 million from foreign investors.

7. Paper ink_removing technology for the recycling of waste paper. Investment: ”ē11.2 million, with ”ē5 million from foreign investors.

8. Production of detergent. Investment: ”ē5.6 million, with between ”ē2.6_5.2 million from foreign investors.

9. Polyethylene cable packaging materials. Investment: ”ē5.8 million, with ”ē2.8 million from foreign investors.

10. Melamine products. Investment: ”ē15 million, with ”ē7.5 million from foreign investors.

11. Production line for flexible resin. Investment: ”ē10 million, with ”ē4.5 million from foreign investors.

12. Production of non_freon refrigerant. Investment: ”ē4.2 million, with ”ē2 million from foreign investors.

13. Production of carbinol. Investment: ”ē180 million, with ”ē140 million from foreign investor.

14. Sewage treatment plant with a daily capacity of 80,000 tons. Investment: ”ē12.2 million, with ”ē7 million from foreign investors.

15. Pulp processing machinery. Investment: ”ē7.2 million, with ”ē4.9 million from foreign investors.

16. Production of forklifts and steam rollers. Investment: ”ē5 million, with ”ē3 million from foreign investors.

17. Shock absorber for washing machines. Investment: ”ē7.3 million, with ”ē3.7 million from foreign investors.

18. Medium_sized low noise precision bearing. Investment: ”ē8 million, with ”ē3.5 million from foreign investors.

19. Farming machinery. Investment: ”ē13 million, with ”ē5 million from foreign investors.(to be continued)
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China is about to embark on a series of efforts aimed at widening its energy resources to meet increasing demands in the new century. According to the China Energy Research Association, China¬šs coal production will shift westward, while efforts will be made to expand the Shenfu and Dongsheng coal fields. The country will also accelerate the development of hydroelectric power at a variety of river valleys. In the petroleum industry, preference will be given to oil and gas projects in the western part of China as well as in the country¬šs offshore areas. The projects are aimed to develop energy supply bases across the country. Shanxi, Shaanxi, Heilongjiang and Guizhou provinces and the western part of the Inner Mongolia Autonomous Region will become major coal suppliers. The Daqing and Shengli oilfields as well as the oil fields in the western part of China will continue to be the mainstay of the country¬šs oil resources.

Along with the development of conventional energy resources,China will also develop geothermal, wind, solar and tidal energy. Industry experts noted that China will achieve a balance between supply and demand for energy resources. The current net export volume of 30 million tons of coal will be further developed. The net import of oil, however, will show no marked increase. The total consumption of China¬šs unrenewable energy resources will be the equivalent of 1.38 billion tons of coal by next year. The country¬šs annual oil and gas production will top 150 million tons.Meanwhile, experts expect significant nuclear power development in China in the new century. In 10 years, China¬šs nuclear power capacity will reach 20 million kilowatts.
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Details of a 300 billion yuan (”ē36 billion) plan to pipe natural gas from Xinjiang Uygur Autonomous Region in China¬šs far west to the country¬šs eastern coastal regions were disclosed recently. The State Development Planning Commission and the China National Petroleum Corp have submitted a feasibility report on the project to the State Council. A 4,200_kilometer pipeline will carry the gas from fields in the remote Tarim Basin to Shanghai. When finished in 2007, the pipeline will cross seven provinces __ Gansu, Ningxia, Shaanxi, Shanxi, Henan, Anhui and Jiangsu. Officials calculate that the reserves in central Xinjiang will be able to provide 12 billion cubic meters of natural gas every year for both industrial and civilian use in regions along the pipeline.

The central government believes the project will play a crucial role in stimulating economic growth in Xinjiang as well as the other undeveloped regions in the middle and west of China through which the pipeline will pass. Experts from China Petroleum Co Ltd, a subsidiary of China National Petroleum Corp, the nation¬šs key oil development arm, said there is a large demand for natural gas in the Yangtze Delta. Industry experts estimate that Shanghai, Zhejiang and Jiangsu provinces will consume 11.9 billion cubic meters of natural gas in 2005. Consumption will grow to 31 billion cubic meters in 2010. China Petroleum Co Ltd has determined that the Tarim Basin, about the size of France, holds about 419 billion cubic meters of natural gas reserves. Further exploration in the next 5 to 10 years is likely to increase the total to 1 trillion cubic meters.

The first phase of the gas pipe project will cost about 120 billion yuan. The total cost, 300 billion yuan, is about the same as the budget for the country¬šs most expensive engineering project, the Three Gorges Dam. The China Development Bank signed an agreement recently to provide 10 billion yuan in loans this year to China Petroleum to develop oil and gas. The central government is also anticipating foreign investment in the big_money project. Many foreign investors such as British Petroleum Co and Enron Development Corp are striving to become involved in the project. It is estimated that China has 10.8 billion tons of crude oil reserves and 8.4 trillion cubic meters of natural gas reserves.
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The Yantai High_tech Industrial Development Zone has tried to attract more domestic and overseas investors to help accelerate its development to become one of the best high_tech zones in the country. The zone will turn out to be a new scientific and technological area in East China¬šs Shandong Province. In the next five years, the zone will witness an annual average growth rate of 30£„for major economic indexes. By the year of 2005, the zone will have 200 new and high_tech enterprises and it will draw more than ”ē400 million in overseas investment. The annual export is expected to reach ”ē300 million. After five years of development, the zone has made much headway in construction and economic development. Approved by the State Council in April 1998, the zone has been crowned as an ­·Asia_Pacific Economic Cooperation (APEC) Scientific and Technological Industrial Zone" together with Beijing, Xi¬šan, Suzhou and Hefei high_tech zones. It is one of the five high_tech zones in China opening to APEC members.

Since it was established five years ago, the zone has made efforts to improve its infrastructure and strengthen management. The growth rate of each economic index in the zone has reached 30£„ every year. The zone has invested more than 14 billion yuan in its infrastructural construction. About 800 industrial projects backed by foreign funds and investment from other parts of China totaling ”ē2.7 billion have been established in the zone. 499 of them are foreign_invested projects representing a combined investment of 1.1 billion. 59 new and high_tech enterprises, mainly foreign_funded, are involved in electronic information, fine chemistry and pharmaceutical industries. The zone also places great emphasis on emerging industries engaged in electronics, piano and chemical fiber products. According to a development plan, auto parts and machinery manufacturing will be development focuses during the next five years. Their annual production value is expected to exceed 14 billion yuan this year.

The zone has enjoyed some special preferential policies. Besides preferential policies implemented by the State and Shandong Province, the new and high_tech enterprises in the zone can enjoy special preferential policies on land prices, taxes and fees as well as industrial and commercial management. The zone has tried to provide complete services to enterprises in accordance with international practices.

Meanwhile, the zone has offered attractive working and living conditions as well as handsome salaries to attract high_tech talents.
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Silk used to be loved by all and was crowned queen of all fibers because of its comfortability. But it is losing that image, and the country¬šs silk industry has been in a mess since 1994. China has taken steps to repair the industry¬šs image. The country will reduce its silk industry¬šs production capacity by one_third this year in an effort to improve the sector¬šs economic returns. The industry made 320 million yuan (”ē38.6 million) profits during the first 11 months of 1999 after years¬š efforts of the government to reform the industry. But the silk industry has yet to resume its past glory. The country¬šs silk exports totaled ”ē2.8 billion last year, compared ”ē3.5 billion in 1993. The blind expansion of silk processing factories during the 1980s harmed the whole industry.

Less than 60,000 tons of silk were produced in 1999, compared with the more than 100,000 tons of silk production in 1993. About 65£„ of the State silk enterprises are losing money, official statistics shows. The silk association plans to let 24 State silk enterprises go bankrupt in 2000. Banks will be saddled with writing off 1.36 billion yuan (”ē163 million) in bad debts as a result. Qualified factories will be urged to upgrade their reeling machines and undertake innovations in techniques, designs and colors. 29 programs will be helped with their technical innovations in 2000 with 1.54 billion yuan (”ē0.19 billion) in subsidized loans. State silk_reeling factories will also be helped to ease their social burdens and to lower their debt_to_equity ratios. About 17 silk enterprises will be allowed to launch debt_equity swaps in 2000. This involves 2.02 billion yuan (”ē0.25 billion) in capital.
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US_based Cummins Engine Co, one of the world¬šs largest manufacturers of diesel and alternative fuel engines, said China¬šs moves toward emission controls offer the company expanded opportunities in the mainland bus and automotive market. Last year, about 300 buses in Beijing were outfitted with Cummins compressed natural gas engines that met European Union emissions standards. Five hundred more buses will be added later this year. In Shenzhen, 50 Cummins diesel engines have been installed in local buses. Buses using diesel engines in Shanghai have been blamed for emitting billows of black smoke. Compared with other fuel engines, the diesel engine is ideal for public transit because of its lower operating cost and good performance. At present, all domestically manufactured cars are required to meet the lowest European Union emission standards. Cummins currently has 15 joint ventures, eight regional distributors and more than 80 dealers in China.
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Shell Exploration China Ltd, an arm of the oil giant Royal Dutch/Shell Group, has signed an agreement with the China National Petroleum Corp to conduct a feasibility study on a proposed ”ē3 billion project to develop a major natural gas field in northern China. The company said the project is part of a strategy to involve itself in the development of natural gas in China. Natural gas, which was traditionally used for producing fertilizers in China, is now recognized by more and more Chinese as an efficient and clean alternate source of energy. The agreement between Shell and National Petroleum sets out a plan for an integrated project at Changbei in the Ordos Basin in Inner Mongolia. The project includes gas production, construction of new pipelines and development of gas markets in northeastern China. Shell has already had discussions with National Petroleum about conducting a joint study on a major gas field in the Tarim Basin in China¬šs far west.
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German applied chemistry giant Henkel AG established its fifth surface technology joint venture in China recently. Surface technology is the use of chemical or physical methods to finely cover materials such as cars and steel. The Changchun Henkel Surface Technologies Co Ltd, in which Henkel invested 30 million yuan (”ē3.61 million), is the 19th operation the German company has set up in China, demonstrating its long_term commitment to the potentially huge Chinese market. The Chinese partner of the venture is Changchun Automotive Sealant Plant, a small collectively owned enterprise. The joint venture will mainly manufacture PVC coating, specific adhesives for the automobile industry, car sealers and coatings, paint_protection products and industrial treatment chemicals. Henkel has already built up surface technology joint ventures in Guangzhou, Shanghai and Wuhan. Changchun Henkel will introduce Henkel¬šs advanced management expertise, sophisticated technologies and strong product development skills to become a competitive firm.
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