Another first: the Sino-Swiss Joint Venture Fund Management Company
China Development Bank (CDB) and Swiss State Secretariat for Economic Affairs (Seco) signed a joint venture contract for the establishment of the first Sino-foreign joint venture fund management company to be established in the People's Republic of China. The company will establish and manage investment funds and provide investment advice as well as services for investment funds. (Embassy of Switzerland, 21 September)

China opens "Financial Supermarkets"
The Agricultural Bank of China opened more than 100 "financial supermarkets" in 100 large and medium-sized Chinese cities, to offer a full range of financial services to individual customers. The list of services includes some that are not provided in bank branches, such as conducting foreign currency transactions for individuals, providing individual use of loans and providing safe deposit boxes. (People's Daily, 17 September)

Foreign firms briskly recruiting locals
Foreign companies are hiring locals at an unprecedented pace to cut costs and because of the language and culture benefits. The number of Chinese working at foreign branches or representative offices last year stood at more than 100'000, up 210% from a year earlier. (SCMP, 17 September) In total, there are approx. 6 Mio. people (ca. 3% of the workforce) employed by foreign-invested companies.

Housing price hike slows down in China
The growth rate of China's average housing price dropped for the first time this year to a single digit level of 9.2% in August. However, the August real estate index was 3.04 points higher than a year earlier, which shows the real estate development sector still maintained a strong momentum. (People's Daily, 18 September)

Foreign business rules to be changed
According to Hu Jingyan, director of the Department of Foreign Investment under the Ministry of Foreign Trade and Economic Cooperation, after joining WTO, China will abolish the three rigid rules on the "percentage of local investment", "balance of foreign currency" and "percentage of products for export" of the enterprises with foreign investment. (ChinaOnline, 19 September)

China's economy to grow at 7%
According to Zeng Peiyan, minister in charge of the State Development Planning Commission, the Chinese economy will keep growing at the rate of 7% or so in the next five years despite the sluggish economic situation elsewhere in the world. Zeng said in order to realize the goal of steady growth, the Chinese government will continue its policy of stimulating domestic demand, and will try to turn the potential demand into real buying power. (Xinhua, 20 September)

Aviation industry looks to China as savior
With the world aviation industry in a slump, a glimmer of optimism pervaded the China 2001 Aviation Exposition this week in Beijing as China confirmed purchases of planes and continuing plans to expand the domestic market. (ChinaOnline, 20 September)

WTO formally admits Taiwan
WTO formally admitted Taiwan into the international organization even though details for admission were completed a year and a half ago. Under terms of an agreement reached in 1992, Taiwan could not be admitted before China. Now both China and Taiwan will be formally approved at the November meeting of international trade ministers in Qatar. Beijing has initially objected to Taipei's admission but relented because Taiwan has its own customs territory with different rules for importing goods. Both Hong Kong and Macau are also members of WTO. (ChinaOnline, 20 September)

Pace picks up on bank reforms as market forces come into play
Central Bank governor Dai Xianglong outlined a three-step reform blueprint (overhauling management and eventually allowing foreign and domestic shareholders and then listings), saying he hoped the banks' transformation would take place in "five or more years". He warned the financial sector was ill-prepared to handle the onslaught of foreign competition that will come with China's entry to the WTO. The Big Four - Bank of China, the International and Commercial Bank of China, Agricultural Bank of China and China Construction Bank - are technically insolvent under Western standards, weighed down by a mountain of non-performing loans. (SCMP, 20 September)

USD 13 billion in projects up for bids
The fifth Beijing/Hong Kong Economic Co-operation Symposium on October 23 and 24 will see 377 projects worth USD 13.7 billion put up for bidding. The symposium will be of special significance this year as foreign businesses will be given the opportunity to bid for the right to invest in Olympic infrastructure projects. (SCMP, 20 September)

Foreign head-hunters coming to China
Foreign head-hunting firms will be allowed to do business in China starting October 1. The prohibition is only being lifted partly, with foreign firms required to form joint ventures with domestic counterparts and to have provincial licensing, Attracted by China's huge market potential, some overseas job agencies have already begun carrying out business in China without official approval. (People's Daily, 20 September)

First Sino-foreign-funded wholesaler set up in Shanghai
Shanghai Baihong Trading Co., Ltd. was co-founded by the Shanghai No.1 Department Store and the Marubeni Cooperation, Japan, to become the first Sino-foreign joint venture wholesaler in China. The company will mainly deal in wholesale business while dealing in imports and exports, storage, processing and distribution. China had banned the setting-up of such joint ventures until 1999. (People's Daily, 20 September)

No financial crisis imminent in China: Dai Xianglong
The governor of the People's Bank of China moved to allay the fears of some analysts that China was facing the possibility of a financial crisis. Dai admitted the ratio of non-performing loans of State-owned commercial banks is relatively high while capital inadequacy of some commercial banks and payment difficulties of a few small financial institutions still exist. But he indicated China's outstanding external debt amounted to USD 145.7 billion at the end of last year, with an aggregate debt-to-current-account-receipt ratio of 52.7% and a debt-to-GDP ratio of 13.5%. He also revealed a short-term-to-total-debt ratio of 9.0% and a debt service ratio of 9.2%. (People's Daily, 20 September)

China faces stern export situation in next four months
According to Sun Zhenyu, Chinese Vice Minister of Foreign Trade and Economic Cooperation, China is expecting a possible decline in export growth in the remaining months of the year. China, especially exports of China-made electronic products, will not avoid the negative impacts of the U.S. economic slump, which has worsened after the terrorist attack of 11 September. The foreign trade administrations are working with the administrations of customs, taxation, commodity inspection and banks to create a more favorable situation for export-oriented enterprises, Sun said. (People's Daily, 20 September)

Foreign venture capital welcomed
The Ministry of Foreign Trade and Economic Co-operation, the Ministry of Science and Technology and the State Administration for Industry and Commerce issued a notice announcing that foreign companies would be allowed to set up wholly owned or Sino-foreign joint venture capital firms in China. (China Daily, 20 September) Beware, as usual there is a host of conditions and restrictions to this opening of another important market sector.

Intel to invest another USD 300 million in China
The world's largest chip-maker Intel is to invest another USD 300 million in China, to expand its chip packaging and testing plant in Pudong, Shanghai. (Xinhua, 21 September)

China Post marches to logistic industry
The State Postal Bureau aims to become the country's biggest logistics provider, supported by its far-reaching network and decades of delivery experience. After China's entry into WTO, China Post must grow into a competitive logistics provider within the three-year protection period, in order to be able to survive when foreign logistics giants arrive. China's logistics market is estimated at around USD 215 billion. (China Daily, 21 September)

ADB predicts 7.7% mainland growth
China's economic growth will remain high at 7.7% this year before hitting 8% next year, according to the Asian Development Bank. The forecast came as the bank warned that global economic growth could be cut by half this year, comparing the fallout of the terrorist attacks in the United States to the 1997 Asian crisis. (SCMP, 21 September)

China, US to set up first helicopter joint-venture
Shanghai Little Eagle Science & Technology Company and Sikorsky Aircraft Corporation of the United States decided to set up China's first helicopter joint-venture company. Shanghai Sikorsky Helicopter Company will develop a new type of light helicopters mainly to meet China's domestic demands. (Xinhua, 22 September)

Retail prices see steepest decline in six months
The mainland's retail price index eased back a year-on-year 1.2% last month, the steepest decline in six months. The figures, published by the State Statistical Bureau, also showed that the RPI fell 0.5% year on year in the first eight months. (SCMP, 22 September)

Weekly Market update		21 September 2001	14 September 2001
Shanghai A		1890.40	1901.14
Shanghai B		146.89	152.49
Shenzhen A		557.09	564.35
Shenzhen B		229.24	256.20
Hong Kong Red Chip		730.79	765.18
Hong Kong H		375.27	381.03
Source: South China Morning Post