Unified tax system planned
Chinese officials and experts have more or less reached an agreement to adopt a unified tax system to replace the current system which offers preferential policies to foreign investors. (People's Daily, 11 June)

China publishes 228 major FDI projects
The State Development Planning Commission published a list of 228 major projects for foreign direct investment worth a total of USD 340 billion. These projects fall into infrastructure or hi-tech fields, with one third of them to be built in the country's underdeveloped western areas. All these projects will enjoy preferential government policies including tax reduction or exemption. (People's Daily, 11 June) Unified tax system?

Social pressure puts break on economic reforms
The Leadership in Beijing is building a case for slowing down economic reform just ahead of the country's accession into the WTO by highlighting social tensions. The reports on protests and anti-government demonstrations have taken observers by surprise. In the past the government would tone down those reports and push ahead with economic development. But even premier Zhu Rongji told students of Qinghua University that a slowdown of major reforms was inevitable under the current circumstances. (www.cbiz.cn, 11 June)

SETC reiterates ban on disposable tableware pollutants
The State Economic and Trade Commission issued the "Urgent Notice on Immediately Halting the Production of Disposable Expanded Plastic Tableware." Despite repeated bans, disposable expanded-plastic tableware just refuses to go away. A recent survey found that competition from cheap, disposable expanded-plastic tableware has left idle much of the production capacity of enterprises producing more environmentally friendly disposable tableware. (ChinaOnline, 11 June)

Consumer confidence index on rise
The consumer confidence index continued to rise in April, increasing by 5 percentage points over March to reach 97.5 points, according to the National Bureau of Statistics. The latest survey showed that respondents were optimistic about China's economic outlook in 2002, but were not so sure about their personal income growth. The unfavorable world economy also dampened consumers' outlook on future financial conditions. (ChinaOnline, 11 June)

Guangdong tax bureau to scrutinize high-profit industries, high-income individuals
The Guangdong Local Tax Bureau has announced a crackdown on all illegal activities, especially tax evasion. The bureau plans closer scrutiny of companies in high-profit industries and of high-income individuals. It intends to set up special accounts for high-profit industries and high-income individuals permitting tighter government control of personal income tax collected from foreign nationals who work in China and of Chinese nationals who work overseas. (ChinaOnline, 11 June)

Economic experts 'cautiously optimistic' about 2nd Quarter
A recent report released by the State Council's Development Research Center says that there are many indeterminate factors in China's economic development this year. The dropping growth rate of the world economy, the slowing increase in world trade as well as slow growth in the consumption of China's low-income groups and public investments will affect the Chinese economy negatively. On the other hand, the 10th Five-Year Plan and the plan to issue RMB 150 billion of special government bonds for long-term constructions have entered their implementation phase. Other positive factors are the plan to raise the salaries of government employees and the increasing flow of foreign investment into China (ChinaOnline, 11 June)

Legend forges USD 200million internet link with AOL
America Online and Legend Holdings, China's top computer-maker, have launched an joint venture to develop the Internet on the mainland, but government restrictions will severely limit what it can do. The venture is registered in Hong Kong, to avoid the need for approval from the Ministry of Information Industry in Beijing. It will engage in activities that are allowed under the regulations and government policies in China. However, the wealth of content owned by the Time Warner division of AOL Time Warner is thus excluded. Time magazine, its flagship product, is regularly banned in China and its Web site is often inaccessible. (South China Morning Post, 12 June)

Japan Telecom hooks up with China Telecom
Long-distance phone carrier Japan Telecom Co Ltd has agreed to forge ties with China's biggest telecom company China Telecom. Under the accord, the two companies will seek future cooperation in providing telecommunications services. The tie-up may also help the world's biggest mobile phone company Vodafone Group plc of Britain to expand in China. Vodafone owns a 20% stake in Japan Telecom. (China Daily, 12 June)

Beijing factories to be moved out of town
Beijing plans to move nearly 100 large factories out of the urban area over the next five years, a vice mayor has reported. More than half the factories owned by the Beijing government are concentrated in the city's downtown area. The relocation scheme will leave six million square metres of space open for future development.(People's Daily, 12 June)

Environmental industries to get preferential treatment
China will devise preferential policies to help environmental industries develop. The particular focus will be on environmental technology and equipment; environmentally friendly materials and medicines; comprehensive recycling of waste materials; and information services. The industry is expected to grow 15% annually and to have an output value of RMB 200 billion by 2005.(Economic Daily, 12 June)

Currency smuggling in Guangdong still running rampant
In the first four months of the year, provincial customs officers dealt with 143 instances of currency smuggling, involving nearly RMB 30 million. The currencies included the renminbi, Hong Kong dollar, US dollar and Portuguese escudo. (China News Service, 12 June)

New deal breaks telecom monopoly
China Telecom and China Railcom joined hands in network inter-connection, which is expected to strengthen the communication ability of both. It means that China Railcom will now be able to carry out business nationwide sharing the fixed-line telecom network with China Telecom. The deal is quite critical as the inter-connection forms the basis of nationwide telecoms operation in the country, and is considered to be the major feature in breaking the monopoly. (China Daily, 13 June)

China's asset management begins international roadshow
The China Huarong Asset Management Corporation kicked off an international roadshow, in a fresh move to lure investors in Britain and the United States. This is China's first move of the kind to introduce to foreign investors the investment potential of the country's non-performing assets and its policies and legal framework regarding the sales of the assets. Huarong aims to retrieve about 30 cents on the dollar from asset sales. Currently, China's four state financial AMCs have purchased non-performing loans totaling RMB 1.3 trillion from state-owned commercial banks, and Huarong's assets lead all the other three to hit RMB 407.7 billion, with more than 70'000 debtors. (Xinhua, 13 June)

Beijing's high-income earners under taxation surveillance
Beijing's districts and counties each came up with a list of about 100 high-income earners whose taxation behaviors will be specifically monitored by the government. Separate files will be kept on these wealthy individuals, and their economic activities and incomes will be tracked and verified. (ChinaOnline, 13 June)

Foreign-funded clinics enjoy brisk business
Foreign-funded and joint venture hospitals and clinics are increasingly serving local Chinese who can and wish to pay high prices for the advanced facilities and better service. Foreign clinics attract customers with their good environment and services. (ChinaOnline, 13 June)

China's foreign trade close to USD 200 billion
China's foreign trade has been increasing despite sluggish growth in the world economy, and the country's two-way trade from January to May was up 13.5% to USD 197.68 billion. The past five months saw an 11% increase in China's exports, which totaled USD 102.5 billion, a slowdown from last year's 13.2%. Analysts here attributed this slowdown to the overall decline in market demand. Meanwhile, China's imports from January to May reached USD 95.18 billion, 16.3% up year on year. (Xinhua, 13 June)

Industrial export growth slides in May
China's industrial export sector failed to maintain double-digit growth for the first time in 16 months. Industrial enterprises reported RMB 122.8 billion in exports during May, up 8.2% over the same month of the previous year. China's value-added industrial output totaled RMB 227.9 billion for May, a 10.2% increase over a year ago. However, the growth was still 1.3 percentage points lower than that seen in April. (ChinaOnline, 13 June)

Crackdown on Internet cafes
Mainland authorities have closed 1'943 Internet cafes and suspended licenses of another 6'071 in a national crackdown on irregularities in their operations. The authorities have taken a close look at 56'800 Internet cafes nationwide. (Xinhua News Agency, 13 June)

Wood imports surge
China's wood imports have increased further since the beginning of this year. This is the third consecutive year that China has posted the wood import growth since the government rolled out natural-forest protection measures in the second half of 1998 when the country suffered serious flooding. (ChinaOnline, 14 June)

HKSE: Red chips plunge as Beijing media highlights illegal money flow
China-related shares in Hong Kong nose-dived as Beijing's official media acknowledged the illegal outflow of money to play stocks for the first time, heightening fears a crackdown is looming. The outflow of money is estimated to be at least HKD 50 billion since the opening of B-share markets to domestic investors in February. While the numbers represent what is thought to be the tip of an iceberg, it is the first official mainland confirmation that money is leaking out, despite strict foreign exchange controls to protect the non-convertible yuan. Mainlanders are banned from making investments overseas. (SCMP, 14 June)

Deflation fears fade as CPI rises
The benchmark consumer price index rose 1.7% last month from a year earlier, the biggest growth since the year began. The growth was bolstered by the increase in capital value in services items, recovery of grain prices as well as sustained investment from government, foreign and private enterprises. The index, which indicates consumption demand, reaffirms that China has moved steadily away from deflationary pressures. (SCMP, 14 June)

State-owned shares sold to finance pensions
To fund its social security system, the government will sell 10% of the RMB 1.2 trillion state-owned shares this year. Beijing will use the money raised to finance pensions for the 200 million retirees the country expects to have within the coming 30 years. It is estimated that in the last three years the deficit in the government's pension fund program rose to RMB 199 billion. (www.cbiz.cn, 14 June)

Use of FDI surged by 18% in first five months
Despite a gloomy world economic outlook, China's actual use of foreign direct investment jumped 18% year-on-year in the first five months of 2001. China also approved the establishment of 9'421 foreign-funded enterprises over the same period, 22% up from the corresponding spell last year. Between January and May, the actual FDI in China reached USD 15 billion while contractual foreign investment also registered a hefty 42.29% rise to USD 25.97 billion. By the end of May, China had 373'766 foreign-funded enterprises, with USD 702.68 billion worth of contracts and USD 363.68 billion actually in place. (China Daily, 15 June)

Economic growth expected to reach 8% in first half year
According to forecasts of the State Statistical Bureau China's economic growth for the first half of this year will reach nearly 8%. After a economic growth of 8% in 2000, the government this year expects a economic slowdown mainly because of a diminishing economy in the United States and a weak economical recovery in Japan, the country's largest trading partners. (www.cbiz.cn, 15 June)

Large investment on railways
China will spend RMB 350 billion on 7'000 kilometres of railway lines in the 2001-2005 period. This will bring the total length of China's railways to 75'000 kilometres by 2005. About RMB 270 billion will be used for a new railway network and RMB 80 billion for new locomotives. (Xinhua, 15 June)