China starts new round of talks with WTO over membership
China and the World Trade Organisation opened a new round of talks. A new round of Swiss-Chinese discussions are slated for next week in Geneva. During a visit to Beijing Swiss President Adolf Ogi said: "We hope that with a little bit of flexibility and creativity, we should be able to conclude technical discussions at the end of the month. We have every interest in arriving at a result fast." Outstanding issues include a Swiss request for licenses to sell insurance in China and a lowering of import tariffs on watches. (China Daily, 15 September)

Sinopec to get listed in Hong Kong and New York
China Petroleum Chemical Industry Group (Sinopec) announced that it was stepping up preparations for its October's listings on both the Hong Kong and New York stock markets. Sinopec is China's largest petrochemical manufacturer (1999 operating income: of RMB 213 billion) and also ranks among top Asian petrochemical giants. (China Daily, 12 September)

Loss of investment slowing down
China received contractual foreign investment of USD 27.64 billion in the January-July period, up 24% over the corresponding period last year. Actual foreign investment during that time amounted to USD 18.99 billion, representing a slowing in the longer-term decrease in foreign investment. (China Daily, 12 September)

Pension fund shows deficit in 1. half
China's total pension fund in the first six months of this year amounted to RMB 94.04 billion, an increase of RMB 15.16 billion, or 19.2%, over the first half of 1999. However, actual expenditures went up 18.2%, or RMB 14.69 billion, over the same period last year, causing a deficit of RMB 1.33 billion. (China Online, 12 September 2000)

China opens entire light industry to foreign investment
According to China's State Bureau of Light Industry, all 44 sectors of China's light industry have been completely opened to foreign investors. The light industry is the backbone of China's consumer-goods industry and contributes a third of its foreign exchange earnings. The sector includes more than 2,000 foreign-funded firms and has used more than USD 40 billion worth of foreign investment. (ChinaOnline, 12 September)

IKEA cuts prices in China stores to boost sales
Swedish home furnishings maker IKEA announced that it will cut substantially the price of all goods it sells in China in order to boost its flagging sales in China. Compared to IKEA's sales in other parts of the world, IKEA's two stores in Beijing and Shanghai did not achieve a satisfactory performance during its last fiscal year. (China Online, 12 September)

Eastern region ahead in industrial output
During the first six months of this year, the eastern region's total industrial production value was RMB 2.5 trillion (+17.66%), the central region's was RMB 611.7 billion (+12.56 %) and the western region's was RMB 286.1 billion (+11.67%). (ChinaOnline, 13 September)

Overseas-funded firms show high export growth rate
Export growth rate of overseas-funded enterprises in China surpassed that of the state-owned enterprises (SOE) in the first eight months of the year. The SOE exported USD 76.5 billion of goods, up 29%. Their exports accounted for 48% of China's total. The export of overseas-funded enterprises was USD 74.6 billion, up 36.8% and accounting for 47% of China's total exports. (Xinhua, 13 September)

Crackdown on widespread tax evasion by bonded warehouses in Beijing
Bonded warehouses and zones, established to encourage export-oriented businesses and hi-tech enterprises, are granted special tax benefits in imports of commodities that should be processed for exports only. However, many firms have taken advantage of this by importing goods free of tax and selling them on the home market. (Guangming Daily, 14 September)

Consumer prices up 0.3%
China's consumer prices rose 0.3% in August compared with the same month last year due mostly to higher food prices, the National Bureau of Statistics said. It was the fourth straight month that the country's consumer prices have risen since the beginning of this year. (China Daily, 14 September)

11.5% live in absolute poverty
A new World Bank report concludes that at the end of 1998 China had 106 million people living in poverty, about 11.5% of the population. The problem stands out in ethnic minority areas despite a repeated pledge by mainland leaders to develop remote areas inhabited by ethnic minority groups. The report points out that credits for poverty reduction often do not reach the needy. Many local governments in poor areas use poverty relief loans to start up rural industries in order to generate funds to pay their own staff. (South China Morning Post, 14 September)

Trade hits high, money supply on the rise
China's exports and imports last month hit record highs of USD 23.3 billion (+27.4%) and USD 20.8 billion (+54.6%). Consumer loans were up, too, and the central bank increased the money supply. (China Daily, 14 September)
Note that the 27.4% export growth rate for the month of August is considerably lower than the 35.8% growth rate of the first seven months of 2000. Meanwhile, the value of China's imports went up strongly due to increased domestic demand and price hikes of crude oil and non-ferrous metals on the international market.

Major corruption-trials in Fujian province
Behind closed doors, trials began in Xiamen and four other cities of Fujian province. At least 250 city and provincial level officials - among them Li Jizhou, former deputy minister of public security - stand accused of helping the local Fairwell group earn over USD 9 billion from illicit trading and tax evasion. The secrecy surrounding the trials is an indication of how high the web of corruption spins. (ChinaOnline, 13 September)

Beijing targets corruption
According to prosecutors 23,000 graft cases and 5,700 government and Communist Party officials had been investigated this year and RMB 1.6 billion in stolen funds recouped. Large-scale cases involving bribery and embezzlement of more than 1 million RMB in the first eight months of this year had increased by almost 12%. Cases of people taking bribes had also risen by more than 30%. (South China Morning Post, 14 September)

Farmers protest against corruption
China has seen a series of violent protests by farmers, complaining about corruption among local leaders. In one of the mainland's biggest civil disturbances in recent years, thousands of farmers rioted in the eastern province of Jiangxi last month in protest over arbitrary fees imposed by local authorities. (South China Morning Post, 14 September)

Cheng Kejie executed
Former chairman of the government of the Guangxi Zhuang Autonomous Region and deputy chairman of the Standing Committee of the National People's Congress Cheng Kejie, who had been convicted for graft in July, was executed in Beijing, after confirmation of the death sentence by China's Supreme People's Court. (Xinhua, 14 September)
A commentary in People's Daily of 15 September calls the execution a "Victory of Justice and Law" and points out that "the CPC is completely capable of eliminating cancers invading into the body of the Party, by its own powers, to maintain its progressive nature and purity."

Severe aluminum shortage looms as consumption increases
China will face an aluminum shortage by 2003 if its consumption rate continues to increase. China's aluminum production ranks third in the world, after the United States and Russia. Consumption also ranks third, behind the United States and Japan. China remains one of the largest importers of aluminum. (ChinaOnline, 15 September)

Rising oil prices and China's economy
In 1999, China's output of crude oil reached 160 billion tons, and it imported 40 million tons of petroleum. This year's net import is expected to exceed this figure. In 1998 and May of this year respectively China's crude oil prices and refined oil prices became linked with international prices. Petroleum only accounts for around 20% of China's energy consumption structure and the negative effects of rising oil prices on the Chinese economy aren't as serious as those in developed countries. Nevertheless, the rise in oil prices does not help the overall development of the Chinese economy. On one hand, it causes many industries' costs to go up and cuts into profits, driving away investments. On the other hand, it causes prices to rise, which restricts consumer demand. As China's net petroleum imports increase every year, some experts estimate that by 2010, China's net petroleum imports will reach 100 million tons, making China the country with the fastest growing demand for oil in the world and thus increasingly vulnerable to the highly speculative and monopolistic international petroleum market. (based on People's Daily, 15 September)

China reports USD 147.6 billion in foreign debt
China's registered foreign debt stood at USD 147.63 billion by the end of June, a drop of USD 4.2 billion (2.8%) from at the end of last year. (People's Daily, 16 September)