EMBASSY OF SWITZERLAND IN CHINA - CHINESE BUSINESS BRIEFING N° 05 26 June

Official visit of Vice-Prime Minister Wen Jiabao to Switzerland
A high-ranking Chinese government delegation led by Vice-Premier Wen Jiabao was received by Federal Councillor Pascal Couchepin on 29 June in Berne. Their talks concentrated on the bilateral economic relations and essentially covered the following subjects:

50th anniversary of diplomatic relations
Bilateral relations in general and the future of economic relations in particular
China's accession to WTO and its impacts
Economic challenges ahead for China, in particular with regard to the development of the West (one of Mr. Wen Jiabao's responsibilities)
Geneva 2000 Social Summit

Earlier that day, Vice-Premier Wen Jiabao had met briefly with the President of the Federal Council, Mr. Adolf Ogi. The Chinese Delegation had come to Switzerland to attend the Geneva 2000 Social Summit, but also visited a number of Swiss companies.

ABB's Go West activity
In an interview with China Business Weekly, Rolf Schaumann, president of ABB China Ltd., outlined ABB's interest in China's western development initiative. In 1998, the group had established the ABB Chongqing Co Ltd. with a total investment of USD 73 million. As ABB's largest joint venture in China, the company's main purpose is to provide the Three Gorges Project and other hydro-powered developments in the Southwest with efficient, reliable and energy saving power transformers. (Business Weekly, 2 July)

Siemens Launches Asian offensive
Siemens launches major investments in Asia, the largest potential market for mobile-business. Siemens wants to increase its market share in all mobile technologies in Asia to 15% by 2002. The investment for building up a strong market position in Asia amounts to some USD 1.5 billion in total, which will be invested in marketing, R&D and production facilities. (www.siemens.com, 26 June)

China to Adjust Oil Prices every month
China will adjust prices of finished oil products for the domestic market once a month starting from July to adjust its oil pricing to the global market. The China National Petroleum Corporation and China National Petrochemical Corporation can decide their own retail prices based on the government-set base, with a floating margin of 5%. (People's Daily, 26 June)

Kentucky Fried Chicken tops international brands in China
Kentucky Fried Chicken is the most famous international brand in China, according to a survey conducted in 30 major cities. As many as 45% of those surveyed said they had tasted Kentucky fried chicken at least once. (People's Daily, 26 June)

Trucking leads China's transportation industry
According to statistics made public for the first time, business turnover in China's road transportation sector was RMB 385 billion (USD 46.5 billion) in 1999, accounting for 4.3% of the total GDP. By the end of 1999, the road transportation sector had a total of 5.376 million vehicles in operation across the country. In 1999, 12.6 billion passengers and 9.9 billion tons of cargo were transported by road, accounting for 91.3% and 77.2% of the transportation system, respectively. (ChinaOnline, 27 June)

Survey finds high amounts of genetically modified foods in Guangzhou
To avoid creating concern among Chinese consumers, overseas producers no longer tell Chinese importers whether their products contain genetically modified ingredients. As a result, China's government is now more watchful concerning such food imports. China also might follow the example of the EU and Japan and require that the labels of foods with comparatively high percentages of genetically modified ingredients reflect this fact for the benefit of consumers. (ChinaOnline, 28 June)

China tourism soaring
More than 33.4 million tourists entered China during the first five months of this year, a 15.8% increase over the same period last year. (People's Daily, 28 June)

China's industrial profits ruled by only 3 sectors
Among China's 40 major industrial sectors, three sectors alone - petroleum exploitation, electric power and electronics - realized RMB 48.14 billion (USD 5.8 billion) of profits, or 56.9% of the total industrial profits from January to April. (ChinaOnline, 29 June)

Pharmaceutical imports up
During the period from January to April, pharmaceutical imports grew by 11.3% compared to last year to USD 45.9 million. While imports of more expensive drugs climbed, those of less expensive drugs fell. These imports also are likely to harm domestic pharmaceutical manufacturers. (ChinaOnline, 29 June)

China's Economy Steams Ahead
China's economy has managed to shrug off a two-year fluctuation trend and maintained a steady growth of around 8% over the first half of this year. According to an analysis report by the State Development Planning Commission, the economy is expected to grow 7.3% in the second half of this year and reach an annual rate of 7.6%. (People's Daily, 30 June)

World Bank loans to China approved
The World Bank approved two loans totalling USD 360 million for the Yangtze Dike Strengthening Project (USD 210 million) and the Hubei Water and Environment Project (USD 150 million). (China Daily, 30 June)

Large drinking water supply projects in Kunming
The Export-Import Bank of China signed a contract with the drinking water supplier in the capital of Southwest China's Yunnan Province, to forward 20.9 billion yen (USD 196 million) of loans from the Japanese Government to finance a water supply project. The project, with a total investment of RMB 3.5 billion (USD 421 million), aims to construct a new water supply system with a daily capability of 600,000 tons in Kunming. There are also plans to purify water sources and build 99.36 kilometres of pipeline. (China Daily, 30 June)

Sino-Swedish Bus Joint Venture in Shanghai
Shanghai Automobile Industry Corporation, Volvo Bus Corporation, and Volvo China Limited signed an agreement to build the China-Sweden Shanghai Sunwin Bus Corporation, with a total investment of USD 97 million. The firm is expected to go into production early next year and manufacture a variety of comfortable and environment-friendly Volvo buses to replace the traditional buses in China. The Sino-Swedish joint venture has also set its eyes on the overseas market. (People's Daily, 2 July)

More Chinese surf Internet
About 13 million Chinese urban residents have had access to the Internet by the end of June, according to a recent off-line sampling investigation. The number accounts for about 11% of the 125 million urban residents who have phones in their homes. The investigation expects the number to rise to 30 million by the end of 2002. (China Daily, 2 July)

Export processors to be pooled
China is going to concentrate its export processing industry in 15 special zones to restrict smuggling and other illegal activities. About half of China's foreign trade is processing trade for the export. Those companies can get preferential treatment like lower import rates for the goods used in this process, but much of those cheaper produced goods end up in the local market. By concentrating this processing trade in 15 zones, custom officials can supervise those activities more closely. (Business Weekly, 2 July)