Carrefour may escape severe punishment
French company Carrefour is unlikely to receive severe punishment for breaking central government regulations during the establishment of its 27 mainland supermarkets. "There won't be any very severe punishment for Carrefour. That would be bad for our image as we prepare to join the World Trade Organization," said one official source. "They will be slowed down, but they probably won't have to close any stores." (Dow Jones Newswires, 23 July) You don't really expect me to comment on this.

Olympic contracts 'open to the world'
China says that Chinese and overseas investors will get an equal chance to bid on design and construction work and the management of most of the facilities for the 2008 Olympic Games. Beijing will build 19 new arenas and renovate 13 others at a total cost of USD 14 billion. Public bids will also be taken for road and telecom projects. (Xinhua, 25 July)

Auto import sales in high gear
China's auto imports are expected to maintain strong growth momentum during the second half of the year after doubling from January to June, but the mix of vehicles will be significantly altered because of punitive tariff actions taken against Japanese automakers. (China Daily, 25 July)

Market order to be further rectified
Vice-premier Li Lanqing urged that a new campaign should be launched to ensure a sound market order in the second half of this year. This time attention should be focused on ending production of fake products and regulating the cultural market. (Xinhua, 25 July)

Urban focus may solve income woes
According to US-based investment bank Morgan Stanley Dean Witter, China can solve its rural income problem by accelerating urban development. They say China's problems stem from low per capita income and high population density and one way of solving the problem was to speed up urbanisation, especially by development of mega-cities. (SCMP, 25 July)

Central bank governor vows to maintain stable yuan
Central bank governor Dai Xianglong said, China will maintain the stability of its currency after the country joins the WTO. Chinese officials say a more flexible foreign exchange regime will be needed to cope with expected external shocks after China becomes a WTO member. But they have given no timetable or specifics on the wider trade band. (Reuters, 25 July)

PBOC to set up new financial supervision bureau
The People's Bank of China is poised to set up a financial supervision bureau. The move is part of China's efforts aimed at controlling economic misconduct in domestic and overseas markets after it enters the WTO. There has been a range of misconduct in recent years involving non-performing assets, illegal loans, financial fraud and missing state-owned assets in financial institutions, including banks and insurance companies. The proposed financial supervision bureau will also strengthen control on foreign exchange in order to crack down on foreign exchange fraud. Finally, the new bureau is expected to set up a supervision facility for offshore financial institutions, aimed at supervising and standardizing foreign-funded financial institutions' activities. (ChinaOnline, 25 July)

Consumer confidence to keep climbing in mainland
A recent survey by MasterCard International points out that because mainland China is about to enter the WTO and because the consumption ability of the mainland Chinese has risen significantly, consumer confidence in mainland China will reach a record high. (ChinaOnline, 25 July)

Huarong invites international investors for bad loan bidding
For the first time foreign investors will have similar opportunities as domestic financiers in dealing with bad loans, as Huarong Asset Management Company starts inviting investors worldwide for a public bidding. The assets involved in the bad loans for the auction are valued at RMB 14.9 billion, originating from 331 companies. Huarong took the non-performing assets from China's largest commercial bank, the Industrial and Commercial Bank of China. It gathered RMB 500 billion of such assets of the bank in total. (www.cbiz.cn, 26 July)

Audit finds RMB 677 million in fund abuses at PBOC
The State Auditing Administration uncovered RMB 677 million in fund abuses at the headquarters of the People's Bank of China and some PBOC branches. More than RMB 70 million worth of state funds were diverted into individual's pockets or illegally employed in branch operations. (ChinaOnline, 24 July)

Foreign exchange restraints should stop capital flight
The State Administration of Foreign Exchange is preparing regulations to improve the monitoring of short-term, cross border capital flow, to set up a monitoring regime on large-sum transactions, and increase the supervision on foreign exchange dealings between banks and trading firms. SAFE estimates that China faced capital flight of USD 53 billion between 1997 and 1999. Other analyst put this figure on USD 98.8 billion. There is little risk that the capital flight will cause a devaluation of the Renminbi in the near future, because of a limited convertibility and vast foreign exchange reserves. (www.cbiz.cn, 25 July)

State assets up 8.7%
State-owned assets at the end of last year were RMB 9.9 trillion (USD 1.2 trillion), up 8.7% from 1999. Operating state assets reached RMB 6.86 trillion, making up 69.4% of the total. Assets in large-sized state firms were worth RMB 4.13 trillion. State assets had been boosted by more government investment in infrastructure and ''a significant improvement in operating efficiency of state-owned enterprises''. (Reuters, 26 July)

1'600 enterprises shut down for environmental destruction
More than 8'800 enterprises have been under investigation since late May for pollution discharges and for environmental destruction. More than 1'600 enterprises have been shut down or fined and 75 people responsible have been penalised. (China Central TV, 27 July)

Lower re-employment rate for laid-off workers
Some 790'000 people, or 11.1% of the total number of laid-off workers from China's state-owned enterprises, got new jobs in the first half of the year. The figure is 4.9% lower than that of the same period last year. Re-employment pressure is expected to increase in the second half of the year due to an upcoming lay-off climax. (Xinhua, 28 July)

Beijing private sector employs one million people
The private sector in Beijing employs over one million people, accounting for 10% of the overall employment in the city. Government statistics show that more than 80% of private enterprises and self-employed business are dealing in the service industry, but some are entering the real estate, information technology, and entertainment markets. (Xinhua, 28 July)

Chinese machinery industry reports stronger growth
China's machinery industry reported better growth in the first half of this year. The total added value surged 14.3% and sales income reached nearly RMB 700 billion, up 17%. The industry is expected to score a 15% growth in output value to reach RMB 60 billion in profit by the end of this year. (People's Daily, 28 July)

Automotive sector becomes major profit maker
The automotive sector has become the leading profit maker of China's machinery industry, with its profit accounting for 42% that of the whole industry for the first half of this year. Experts attributed the bullish market to the government policy to encourage individuals to buy their own cars. (People's Daily, 28 July)

China stock rally looks like history, at least for now
China's formerly high-flying shares, which only a few weeks ago were about the only stocks anywhere in the world consistently posting gains, have been losing altitude fast. And with several negative factors battering sentiment, a quick recovery probably isn't in sight. One major reason for the weak performance is market players' anxiety that a new supply of stocks will soon flood the market. Deepening the gloom are signs that authorities are embarking on another campaign to crack down on a host of illicit activities that plague China's stock market. (Dow Jones Newswires, 27 July)

Weekly Market update		27 July 2001	20 July 2001
Shanghai A		2156.71	2,273.97
Shanghai B		182.95	199.06
Shenzhen A		645.42	680.74
Shenzhen B		291.40	306.33
Hong Kong Red Chip		1083.94	1,069.66
Hong Kong H		474.72	457.58
Source: South China Morning Post