China awards four licenses to AIG
China will issue four new insurance licenses to American International Group, handing it a vast head start over foreign rivals in a compromise deal that ends a long-running dispute over the U.S. insurance company's ownership status in China. (WSJ, 10 December)

China WTO: Entry begins to pry open closed capital markets
Starting on the day of China's entry into WTO, foreign entities will be allowed to establish securities joint ventures with local partners, as long as their stake doesn't exceed 33.33%. Minority foreign-owned joint venture fund management companies (again up to a maximum of 33.33%) will be allowed to manage assets. However, Chinese regulators have as yet made no decision under what criteria joint venture fund management licenses would be awarded. (Dow Jones Newswires, 10 December)

China's industrial output grows at 7.9%
China's industrial production rose 7.9% in November year-on-year, making it the slowest increase in factory output in 10 months. The figures reflect a weakening demand for items such as mobile phones and televisions. (FT, 11 December)

Foreign banks fear China funding cap
Foreign banks face a crippling cost disadvantage in China if Beijing goes ahead with controversial proposal that foreign banks be required to cap overseas borrowings at some new, undisclosed ratio to their assets. Local banks have access to large foreign currency deposits on which they pay about 2.16%. In comparison, the 12-month foreign-currency interbank lending rate is 2.57% and, typically, foreign banks raising money on this market would be charged an additional premium of about 1.5%. (SCMP, 11 December)

Tourism propels Chinese economy
Tourism has become the new growth area for the domestic economy. From January to October this year, overseas arrivals totaled 73.3 million (+5.66%) and foreign currency earnings from tourism reached USD 14.82 billion (+9.28%). (People's Daily, 11 December)

China not to slash interest rates: Dai Xianglong
Responding to rumours that the country is considering an interest rate cut to inflate its sagging economic growth, central bank chief Dai Xianglong said that financial authorities had no immediate plan to cut interest rates of the renminbi. The USD one-year time deposit rate at Chinese banks now stands at 1.25%, while the rate for the RMB is 2.25%. (People's Daily, 11 December)

Pacts on auto city inked in Shanghai
The city signed agreements with 14 multinationals and Chinese auto conglomerates to push forward the construction of its International Automobile City. The agreements deal with building an auto mansion, an auto theme park, an auto service centre, an auto research and development centre and an auto exhibition centre. (China Daily, 12 December)

Sinopec, BP launch JV
Sinopec, China's largest petrochemical company, established a USD 2.7 billion joint-venture with British oil giant BP to build a petrochemical complex in Shanghai that could be the largest of its kind in Asia when it comes on stream in 2005. (China Daily, 12 December)

Protocol readers crash site
On the day it joined the WTO, China's foreign trade ministry published the text of its protocol of accession, all 1'500 pages, on its Web site, but the site crashed for most of the day due to too many visitors. However, the text was only in English, with the Chinese version, which the majority of people wanted to read, unavailable for a few more weeks. (SCMP, 12 December)

China to have first registered three-dimensional trademarks
The newly-revised Trademark Law of China has extended its protection of two-dimensional trademarks to include three-dimensionals and color patterns. The first applicants include the Coca-Cola bottle and McDonald's big "M". (People's Daily, 12 December)

China makes progress in rectifying market order
China has so far dealt with 127'000 cases during this year's market order regulation drive, with more than 30'000 criminal suspects turned to the police. So far this year, government departments concerned have revoked 41'800 business licenses and closed down 152'700 offending businesses. Next year, priority will be given to rectifying and regulating the financial sector, consultation agencies and tourism, and to strengthening production safety. (People's Daily, 12 December)

Beijing approves north-south China Telecom split
The controversial break-up of the mainland's dominant fixed-line operator China Telecom has received formal approval from the State Council. The northern firm will become China Netcom Jitong Communications Group, comprising networks in 10 provinces, after incorporating China Netcom and Jitong Communications. The southern firm, including networks in 20 provinces, will retain the name as China Telecom Group. (SCMP, 12 December)

Foreign firms retain tax privilege
China will offer foreign companies a grace period of up to five years before they have to pay a higher corporate tax rate to be introduced now that the country has joined the WTO. Mainland firms pay a standard 33%, while overseas companies pay 15%. (Business Weekly, 12 December)

Beijing lagging in writing WTO laws
Officials are rewriting hundreds of laws to meet the commitments China made as conditions of WTO membership, frustrating a wave of foreign companies rushing into the market. Even if rules exist, millions of local officials remain unaware or resistant to them. The State Council has yet to finish drafting or revising a group of 40 laws and regulations. Cabinet departments must still scrap or revise 1'000 administrative codes, and Beijing also must still revise or eliminate more than 90 major laws and 1'000 rules. (www.cbiz.cn, 12 December)

China's foreign trade grows
China's foreign trade volume in the first 11 months of this year reached USD 462.77 billion, up 7.4% from the same period of last year. Export increased by 6.3% to USD 241.57 billion and import rose by 8.6% to USD 221.2 billion, leaving a surplus of USD 20.37 billion. In November alone, total foreign trade volume grew 2.4% to USD 44.85 billion, with export up 8.4% to USD 24 billion and import down 3.7% to USD 20.85 billion. (People's Daily, 12 December)

Efforts doubled to create 8 million new jobs
China is to redouble its efforts to create more than 8 million jobs next year to keep its urban unemployment rate at around 4.5%. To achieve the employment goal, the country will encourage the service sector and other labour-intensive industries. Especially community service jobs -- such as housekeeping and milk delivery -- will become a major source, absorbing those laid-off and unemployed in the country's urban areas. (China Daily, 13 December) I like the one about the "milk delivery".

China takes aim at trade discrimination issues
China says it is going to step up pressure on foreign governments to get them to drop their discriminative trade policies against Chinese companies. China has started 11 anti-dumping investigations against foreign producers since 1997. More than 30 countries have started 477 anti-dumping, anti-subsidy and protective measures investigations against more than 4'000 categories of made-in-China products. (China Daily, 13 December)

EU warns more than 13 million farmers will lose jobs
Entry into the WTO will put more than 13 million farmers out of work and may cut output of wheat, corn and soybeans by between 15 to 35%, according to a European Union report. The positive impact of WTO entry will be a rationalisation of farm production and more efficient production, with international competition forcing Chinese companies to improve the quality of agriculture and food products, which will help to raise exports. (SCMP, 13 December)

Foreign banks unlikely to see profit from trade protocol
The market-opening measures outlined by China in its commitments to the WTO may do little to help foreign banks make a profit in a difficult and highly regulated market, according to a position paper by European banks. The gradual opening up as outlined in the WTO agreement may prove too slow to counter the very limited opportunities for profitable business in China, which are also burdened by an unusual amount of bureaucratic requirements. The paper called for more transparent regulations, reliable and enforceable laws and less bureaucratic handling of bank-licensing issues. (SCMP, 13 December)

Global slowdown lowers CPI by 0.3%
China's consumer prices fell 0.3% in November compared with the same month in 2000. It was the second month this year that the CPI dropped following a decline of 0.1% in September, suggesting the global slowdown is having an impact on China. The central government does not expect Chinese consumers, who contributed about 40% to the nation's GDP growth during the first three quarters of this year, to spend more, because of rising concerns about pensions, medical care and children's education. (China Daily, 14 December)

Foreign investment up 15.6%
In the first 11 months of this year, actual foreign direct investment in China rose 15.61% year on year to total USD 41.9 billion. Total foreign direct investment in China is expected to see a two-digit rise for the whole year and surpass the previous record of USD 45.5 billion from 1998. Since the State began allowing foreign direct investment in the early 1980s, China has utilized a total of USD 390.52 billion in actual foreign direct investment. A total of 387'260 companies with foreign investment have been set up. (China Daily, 14 December)

McDonald's to open more shops in China
McDonald's will open 100 chain stores in China every year till 2003, after it announced to close 250 stores in other countries. As McDonald is becoming more and more popular in China's urban areas, the company has opened about 400 stores across the country. In Shanghai alone, it has 50 chain stores. (China Daily, 14 December)

China enjoys bumper 2001 amid global gloom
While much of the world has endured a grim year, China is celebrating an exceptional 2001 crowned by a trio of achievements: WTO membership, Beijing's capture of the 2008 Olympics and its footballers reaching their first World Cup. As most countries contemplate a 12 months blighted by economic slowdown and the fallout from the September 11 attacks, China is instead preparing to welcome the new year amid general euphoria. With annual economic growth estimated to be about 7.4% China has succeeded at almost everything it turned its hand to in 2001. (China Daily, 14 December)

New body to handle anti-dumping
The Chinese government has setup a new organ under SETC, to tackle dumping and subsidies from abroad in the wake of the country's WTO entry. The body, named the Bureau of Industrial Injury Investigation, will conduct investigations into whether and how imported products harm domestic manufacturers. Meanwhile, the MOFTEC has set up the Fair Trade Bureau, the task of which is to investigate and decide whether and how dumping or subsidies operate. (People's Daily, 14 December)

Taiwan postpones key decision on investing in Chinese market
Taiwan delayed a key decision on whether to allow its semiconductor industry to invest in China, highlighting the government's caution as it dismantles barriers to business relations with its longtime political rival. (WSJ, 14 December)

State Statistics Bureau to adopt IMF standards
China has agreed to adopt international standards for much of its economic data, in a major step towards improving the transparency and accuracy of the country's much-maligned statistics. The move is the bureau's latest step to bypass a highly political provincial reporting system left over from the planned economy era. (Dow Jones Newswires, 14 December)

CSRC to clamp down on restructuring
The China Securities Regulatory Commission has tightened rules on corporate restructurings, the manoeuvres behind many mainland stock-market abuses in recent years. They call for reviews of "major restructurings" and empower the CSRC to approve all sales, acquisitions or swaps of assets equivalent to 70% or more of a listed company's total assets. (SCMP, 15 December)

Retail sales mask spending caution
Mainland retail sales rose 10.1% year on year last month, easing slightly from the previous month but still growing strongly. Sales in cities soared 11.5% year on year, reflecting stronger buying power helped partly by salary increases for millions of civil servants. However, sales in rural areas, where roughly 70% of China's 1.3 billion population live, only rose 7.9%. (SCMP, 15 December)

Weekly Market update		14 December 2001	07 December 2001
Shanghai A		1745.21	1818.40
Shanghai B		166.72	172.07
Shenzhen A		510.42	535.17
Shenzhen B		265.61	274.20
Hong Kong Red Chip		1362.58	1397.45
Hong Kong H		1717.58	1777.89
Source: South China Morning Post