800'000 fewer laid off in year's first half
According to the Ministry of Labor and Social Security, 800'000 fewer workers became redundant in the first six months of this year compared with the same period in 2000. At the end of June, there were 6.19 million registered unemployed, equivalent to a jobless rate of 3.3%. The number of employees at state-owned concerns declined 31.42 million, or 27.9%, during 1996 to 2000, while the number of employees at collectively owned entities-a classification that denotes a mix of private and state stakeholders-dropped by 15.17 million, or 50.3%. At the same time, foreign-funded companies created nearly 4 million jobs, while privately owned firms generated 6.48 million positions and individually owned businesses employed 4.27 million. However, most of the newly created positions were filled by new college graduates and immigrant workers from rural areas-with few of the jobs going to laid-off urban workers. According to official estimates, the non-state-owned sector has, since 1992, provided more than 95% of the nation's new job opportunities. (ChinaOnline, 6 August) I agree that the numbers don't really add up, but they do give some indication about the developments in the labor market.

China targets urban unemployment rate below 5%
China will try to keep the urban unemployment rate under 5% during 2001-05. The target will be achieved through urbanisation and the development of the west, with 40 million jobs created in non-agricultural sectors for surplus rural labourers. Currently, the nation has a 3.1% registered unemployment rate. Its pending WTO entry and the speeding-up of structural re-adjustment will increase pressure on employment figures. (China Daily, 7 August)

Local authorities challenge state monopolies
Authorities in Jiaxing, Zhejiang province, have challenged a State Economic and Trade Commission ruling by granting licences to 24 new filling stations. 18 of the 24 new licences will go to investors other than China Petrol and Sinopec. According to a new ruling by SETC, only these two state companies can build new service stations. (Financial Daily, 7 August)

Communications Bank of China to introduce foreign stakes
CBC has final approval to introduce foreign stakes of up to 15%. As the Chinese authorities only allow each foreign financial institution a maximum of 10% holdings, at least two foreign banks will become shareholders of China's 5th largest bank. (Jiefang Daily, 7 August)

Plan launched to prepare China for WTO accession
The State Development Planning Commission has put together several plans and policy initiatives for the coming five years to prepare the country for its accession to WTO. The commission pleads for a fast revision of laws and rules according to WTO regulations, and good preparation of domestic companies for the upcoming competition. SDPC argues that the two most crucial challenges are to change the way the government acts and the impact of equal market access on national enterprises. (www.cbiz.cn, 7 August)

Founder group soon to be listed overseas
Founder Group, a business company under Beijing University and one of China's hi-tech leaders, will soon finish the listing process on stock markets in Japan and Malaysia. Founder will thus become the first state-owned Chinese hi-tech company rooted in the domestic market to be listed overseas. The first case of overseas listing of a Chinese enterprise occurred in 1992, and now the number of overseas listed companies has exceeded 50. (Xinhua, 7 August)

Consulting industry witnesses rapid growth
The number of consultancy agencies in Beijing has reached a record high of nearly 7'000. Currently, more than 30'000 professionals are involved in this industrial line, which produced an accumulated turnover of RMB 8 billion last year. (Xinhua, 7 August)

Guangdong plans to ration water
The Guangdong provincial Government is drafting a comprehensive water rationing plan in a move designed to curb waste water discharge and to prevent a water shortage crisis. There will be quotas for industrial, farming and residential water use in the province. The province used 16.9 billion cubic metres of water and discharged more than 10 billion cubic metres of waste water last year, making it China's No 1 water user and polluter. (SCMP, 7 August)

Singapore's Delgro leads foreign investment charge into Beijing taxi sector
Beijing Jinjian Taxi Co. and Singapore-based Delgro Corp. are seeking approval to set up a joint venture in Beijing. If approval is granted, this will be the first time foreign investment will enter Beijing's taxi sector. (ChinaOnline, 7 August)

Japan eases curbs on imports of Chinese poultry
Japan has decided to lift curbs on the import of Chinese chicken meat and turkeys while keeping a ban on other poultry products. The decision is a tiny bright spot in a bilateral trade relationship that has been strained by tit-for-tat trade restrictions since early this year. Japan is China's largest trading partner, with bilateral trade of USD 42.4 billion and a surplus of USD 380 million in the first half of 2001. (China Daily, 7 August)

China gives go-ahead for purchase of 36 Boeing aircraft
China has given five local airlines permission to buy a total of 36 Boeing 737 aircraft with a combined price tag of USD 2 billion. The permission, which was given last week, reflects improving relations between China and the United States. (China Daily, 8 August)

Industrial production predicted to drop in 2nd half
According to the Economic Information Center of China's State Economic and Trade Commission, the growth rate of China's industrial production will fall every month during the second half of this year. (ChinaOnline, 8 August)

Mobile phone giant looks to invest USD 10 billion in Chinese market
NTT DoCoMo, Japan's largest mobile-phone company, hopes to invest more than USD 10 billion in exploring the Chinese cellphone market. DoCoMo plans to introduce its i-mode cellphone Internet access services jointly with Chinese cellphone manufacturers using wireless application protocol (WAP) and other technologies. (China Daily, 9 August)

Ministry plans more affordable houses to slash prices
The Ministry of Construction will encourage real estate developers to build more low-cost houses by exempting certain fees and deducting some incidental expenses. According to the ministry's plans, China will invest RMB 170 billion to build 225 million square metres of budget houses this year. At the same time, the ministry will control the "unreasonable rise" in prices for commercial housing by tightening management of land resources. It will stop so-called blind development and large-scale construction of luxury houses to prevent new overstock problems. (China Daily, 9 August)

Bayer kicks off China expansion
Germany's Bayer AG kicked off a massive China expansion plan to build a USD 450 million polycarbonate plant in Shanghai. The joint venture, Bayer Polymers Shanghai, marks the first step in the German chemical giant's USD 3.1 billion investment plan to set up an integrated chemical complex in Shanghai. (Reuters, 9 August)

Modest debut by Sinopec
China Petroleum & Chemical's (Sinopec) much-heralded A shares rose 3.3% on their listing debut in Shanghai, one of the smallest opening-day rises by a big mainland stock offering. The rise was a far cry from other big mainland offerings, where the frantic demand for shares by mainland investors pushed the prices to new heights. The small rise reflects poor market sentiment, and also follows a campaign by Beijing authorities to crackdown on rampant stock market speculation by corporations using loans obtained from banks. While some analysts said more timid new offering debuts would help make the mainland's stock markets more healthy and less speculative, others were concerned the weaker markets would pose difficulties for future fund-raising by state-owned enterprises. (SCMP, 9 August)

Policy bank to issue RMB 15 billion in bonds
The China Development Bank will issue RMB 15 billion in seven-year bonds. The issue, half in floating rate bonds and half in fixed rate bonds, will be issued to domestic banks, insurers, rural credit co-operatives and securities companies. (Reuters, 9 July)

Tabloids to be purged
The State Press and Publication Administration is to clean-up tabloids and small-sized periodicals in the second half of the year. Seven types of content have been strictly banned including material considered to be against the party's policy; harmful to social stability; or content that advocates violence, superstition and obscenity. (China Central TV, 9)

China to allow foreign headhunters to enter the market
China will allow foreign headhunters to enter the mainland human resource market, according to an unnamed high-ranking official with the Ministry of Personnel. The ministry is drafting regulations that will initially allow foreign firms to set up joint ventures on the mainland. (Beijing Morning Post, 9 August)

Slowing industrial output reflects slump in exports
Industrial output rose 8.1% year on year in July - its lowest level since December 1999 - reflecting the continuing slump in the export sector. Yet the economy is holding up better than the rest of Asia because it is less export-reliant. Exports account for a fifth of China's GDP. Credit Suisse First Boston senior regional economist Tao Dong said the disappointing output figure hinted at a downturn of the Chinese economy. HSBC chief economist for Greater China George Leung Siu-kay was more optimistic however. He said the economic situation was not worrying, because domestic demand had proved to be sufficient to support economic growth, offsetting falling exports. (SCMP, 10 August)

China Online bites the bullet
The oldest business news provider on China, Chicago-based China Online, has told its creditors they can not pay the bills anymore. After two years of burning an average of five million US dollars, yet another dotcom bites the bullet. The website is still marginally updated. (www.cbiz.cn, 10 August) How lucky our readers are that an Embassy is not a dotcom...

Online retail icon quits
The relationship between China's business to consumer e-business operators and its investors is hostile at present. This was illustrated, when Wang Juntao resigned as chairman and operator of online retailing store my8848.com. While Wang insists that B2C is developing better than ever at present in China, many believe that China's social and financial environment is too far away from B2C maturity. According to the survey, 31.9% of the 26.5 million netizens purchased goods online in the past 12 months. As the netizens' average age is between 20-30, the payment ability of the group is relatively low. (China Daily, 10 August)

China airlines nosedive, lose RMB 2 billion in 1st half
China's airline industry as a whole suffered a loss of RMB 2 billion in the first half of the year. Among the nation's more than 30 domestic airlines, only Hainan Airlines, Shandong Airlines and Shanghai Airlines posted a profit. (ChinaOnline, 10 August)

Shanghai to build new automobile trade centre
Shanghai will spend RMB 100 billion building an international automobile trade centre based in Anting town. It will build a parts production and distribution centre and also increase production of the Volkswagen sedan assembly line, which is based in the region over the next five years. (Labour Daily, 10 August)

Coal industry in the black
China's coal sector posted a profit of RMB 860 million from January to June, a dramatic reversal from last year's deficit of RMB 880 million. The turnaround is attributed to the government's tough efforts to curtail production and boost coal exports. China, the world's largest coal producer, has shut down some 473'000 small coal mines since 1998, cutting coal production down to last year's 910 million tons from the peak of 1.3 billion tons in 1997. (China Daily, 11 August)

Weekly Market update		10 August 2001	03 August 2001
Shanghai A		2042.67	2048.77
Shanghai B		169.55	159.58
Shenzhen A		612.91	611.93
Shenzhen B		280.22	269.91
Hong Kong Red Chip		988.76	1067.32
Hong Kong H		432.94	451.58
Source: South China Morning Post