Textile Machinery Switzerland hosts traditional Swiss Evening
More than 500 guests, among them the head of the State Textile Industry Administration, Vice Minister Du Yu Zhou, attended a gala including a fashion show and competition by young Chinese and Swiss designers at the Swissôtel. The "Swiss Evening" was organized by the Textile Machinery Switzerland (Swissmem) as a contribution to this year's celebrations of the 50th anniversary of diplomatic relations between Switzerland and China.

Swiss bank opens Beijing office
Swiss based European Financial Group Bank (EFG Bank) announced the establishment of its first representative office on the Chinese mainland. Headquartered in Geneva, the bank is the third largest Swiss bank, with total capital assets of CHF 30 billion. (China Daily, 11 October)

ABB to boost China investment to USD 1 billion within four years
The Swiss-based ABB Group, which is the largest automation technology supplier in the world, recently announced it will increase its total investment in China to USD 1 billion within the next three to four years. ABB currently has 25 wholly owned foreign-invested enterprises and joint ventures in China, and it also has opened more than 20 offices there with more than 5,000 employees. (ChinaOnline, 11 October)

Clinton signs PNTR bill into law
U.S. President Bill Clinton has signed a historic trade bill, granting permanent normal trade relations (PNTR) to China. (ChinaOnline, 10 October)

Profits tipped for most state firms by year-end
According to the State Economic and Trade Commission, most state-owned enterprises (SOE) will become profitable by the end of this year. In the past two years, the Government had written off more than RMB 100 billion of bad debts owed by SOE to state banks, another RMB 460 billion debt burden was turned into equity held by the four asset management companies (AMC) set up by the Government, and another RMB 19 billion were provided in cheap loans for SOE to upgrade plant and equipment. Experts are sceptical about the profit estimate. They point out that the Government has not yet made clear what it wanted to do with the equity now held by the AMC. (South China Morning Post, 10 October)

Shanghai gets Bangkok subway contract
Shanghai Subway Construction Co. will build an underground railway in Bangkok, Thailand, marking the first time Shanghai will build a railway system in a foreign country. (ChinaOnline, 10 October)

OECD says China is second largest receiver of investments after U.S.
According to the Organization for Economic Cooperation and Development China has become the second largest receiver of direct foreign investment after the United States, by receiving USD 306 billion of investments from 1979 to 1999. The investments China received make up 10% of the total FDI in the world during that period of time, and 30% in the newly industrializing countries. (Xinhua, 10 October)

CCB, China Unicom jointly launch mobile phone banking services
Mobile phone banking services jointly developed by China Construction Bank (CCB) and China United Telecommunications Corp. were launched in Beijing (ChinaOnline, 10 October)

Per capita GDP set to top USD 800 by year's end
Hinting at a growing middle class, statistics show that by the end of 2000, China's per capita GDP should top USD 800, based on current exchange rates. The statistics show that in the last four years, actual income in rural and urban areas increased by an average 5.4% and 5.6%, respectively. Disposable personal income per capita reached RMB 5'854 in urban areas and RMB 2'210 for farmers. (ChinaOnline, 10 October)

Economic growth fails to plug unemployment gap
China sees more than 8 million new laborers enter the workforce every year. In addition, the number of workers retrenched by the state firms will stay around the 10-million-level for several years. In the rural areas, the number of surplus labor has remained at a high level, reaching an all-time high of 140 million several years ago. With the decrease of farming land, the figure will continue to increase. Each year, tens of millions of rural laborers move to the urban areas to look for jobs, adding further pressure on the unemployment in the country. The total migrant population is expected to reach 130 million by 2005 and almost 160 million by 2010. (Xinhua, 10 October)

ADB invests in private China fund
The Asian Development Bank will invest up to USD 25 million in a private fund to help spur development of small and medium sized businesses in China. It will also help structure the fund, called Liberty New World China Enterprises Investments Limited Partnership, to ensure "governance and management practices". (ChinaOnline, 11 October)

E-commerce network to sell commodities nationwide
China is to invest RMB 5.6 billion over two-and-a-half years to establish the country's biggest e-commerce network to sell commodities nationwide. When the entire project is complete, the trade volume is expected to reach RMB 1.5 trillion. The Web site will bring hope to China's RMB 3 trillion worth of inventories of commodities. (Beijing Morning Post, 11 October)

Volkswagen to invest DEM 3.5 billion
Germany's Volkswagen is to invest DEM 3.5 billion in China over the next five years, which equals the company's total investment in China over the past 15 years. The motor manufacturer will also introduce five series of vehicles into the country, giving it a product range of over 20 models. (CCTV, 11 October)

Monetary policy to remain stable in the fourth quarter of this year
Central bank chief Dai Xianglong believes China will maintain its "steady" monetary policy and protect the stability of the RMB in the 4th quarter of this year. (ChinaOnline, 11 October) 

Booming textile sector imports more machinery
China's textile mills have begun to import more machinery as profitability has improved and exports have shown strong growth. According to analysts, the increase in textile machinery imports is due to the rising domestic demand for textiles and to China's approaching entry into the WTO. (ChinaOnline, 11 October)

Sino-British insurance company established
China International Trust & Investment Corp. and British Prudential Assurance Co. Ltd, jointly established a life insurance agency in Guangzhou, the capital of Guangdong Province. (Xinhua, 13 October)

CPC Central Committee approves draft 5-year-plan 2001-05
The Communist Party of China Central Committee mapped out a blueprint for economic and social development during the 10th 5-year-plan period (2001-05) at the 5th Plenary Session of the 15th Central Committee of the CPC. The theme of growth emerged as a catchall remedy for China's economic ills, and the committee set a target of doubling the GDP by 2010. The fundamental aims of the reform, according to the committee, are the opening of China's markets, the advancement of the country's scientific innovations and the enhancement of basic living standards. (Xinhua, 12 October/ChinaOnline, 13 October) See below for details.

Banks declare Hainan flagship firm in default on USD 2 billion of Samurai bonds
Japanese creditors have declared the Samurai bonds issued by Hainan International Trust & Investment Corp (Hitic), in default of 28.5 billion yen. The declaration by Sumitomo Bank and other Japanese creditor banks, effectively a demand for immediate payment, is the first default of a mainland company on the Samurai market. The default casts new uncertainty over how Hitic's long-awaited restructuring is likely to proceed. (SCMP, 12 October)
The Japanese Government pressured China on the failure of one of its trust firms to meet yen debt repayments, and urged Premier Zhu Rongji to improve his country's often hostile business environment. (SCMP, 14 October)

Financial institutions increase lending
China's financial institutions boosted lending to enterprises and individuals in the first nine months. By the end of September, outstanding loans rose to RMB 9.59 trillion, up 14.4% over the end of September last year. Financial institutions have increased short-term lending to aid enterprises and encouraged individual consumption. They have also increased loans to boost infrastructure investment and technical upgrading of industrial firms. (China Daily, 14 October)

China's export and foreign investment sharply increase
China's imports and exports totaled USD 345 billion between January and September, an increase of 35.7% over the previous year. Exports totaled USD 182 billion, up 33.1%, and imports stood at USD 163 billion, up 38.7%. The contracted foreign investment was USD 38 billion, up 27.9%, while the actual foreign investment this year has decreased by 8.7%. (People's Daily, 14 October)

Enclosure

• Plenum participants held that China will soon enter a new development stage in which a well-to-do society that benefits all will be built and modernization will be speeded up.
• Work must be done to optimize the industrial structure and to upgrade China's agricultural, industrial and service sectors for the benefit of all, said the communique.
• Particular attention should be paid to strengthening the leading role of agriculture to guarantee a stable supply of grain and make it possible to continue increasing farmers' incomes, it said.
• Measures should be taken to speed up the reorganization and transformation of industries, to raise overall quality of China's industrial sector and sharpen its competitive edge in the international realm, said the communique.
• Great efforts must also be made to develop the service sector to substantially expand its presence in the national economy.
• The distribution of productive forces should be rationally readjusted for the benefit of the strategy of developing China's western areas, and steady efforts should be made to promote urbanization and balanced regional, urban and rural development. The plenum also agreed that efforts must be intensified to improve infrastructure, protect the environment and strengthen control of population growth and resources so as to maintain sustainable development. 
• The plenum gave its backing to the notion that economic development and restructuring should rely on scientific innovation.
• Reforms should be deepened to break through the obstacles holding back productivity, said the communique.
• Large and medium-sized State-owned enterprises should establish modern business systems and strengthen their management structures so as to compete successfully in the market.
• The plenum called for the readjustment of the distribution and ownership structure of State-owned enterprises and urged that the private sector, especially those businesses involved in technical fields, be supported, encouraged and guided.
• A standardized, national market system with fair competition and order should be established and perfected, stated the communique.
• The government should be further transformed in line with the needs of the socialist market economy. The macro-restructuring process and management should be strengthened and improved.
• The communique opinioned that as China moves closer to entering the World Trade Organization, its opening-up policy has entered a new stage. Steps should be taken to ensure that areas of the economy that are still relatively closed off to the outside world open up.
• Scientific and technological advance is decisive in enhancing a country's comprehensive strength, according to the plenum. The strategy of revitalizing China by relying on science and education should be continued and active measures should be taken to enhance and sustain its innovative capabilities.
• The plenum also pointed out that a major strategic task for the future is to train, attract and give full play to talented personnel. Efforts should be made to vigorously develop human resources, step up the development of education and build up a huge contingent of quality talents.
• The plenum noted that measures should be adopted to increase the incomes of people in all areas, improve their living standards and provide social security so that people can live and work in peace and contentment.
• A complete social security system is an important pillar of a socialist market economic system. Efforts should be made to gradually establish and improve the basic retirement insurance, and medical and unemployment insurance systems for urban workers and personnel and to improve the minimum living standard for urban residents, said the communique.
• According to the plenum, the development of a political system of socialist democracy and running the state according to law are important to the socialist modernization drive.
• As required by the economic reform process and the modernization drive, the restructuring of the political system has to continue and more efforts should be made to support democracy.
• According to the plenum, the Party should insist on the strict discipline of its members and step up the fight against corruption. To allow for the further development of the socialist cause and a smooth transition from the old generation to the young, the Party should strengthen the leadership at all levels and especially concentrate on the young cadres.
• The plenum also decided to repeal Xu Penghang's alternate membership of the CPC Central Committee and punish him by keeping his Party membership with a two-year probationary period. The plenum gave Yue Haiyan, Huang Zhiquan and Wang Zhengfu, all alternate members of the CPC Central Committee, full membership.

(Xinhua, 12 October)
Paragraphs and bullets by Swiss Embassy