Support mounts for cheaper money
Mainland economists have voiced support for lower interest rates following strong indications by Premier Zhu Rongji and the central bank that an eighth rate cut in almost six years was possible. China's interest rates are at 2.25% for one-year deposits and 5.85% for a loan over the same period. The last rate cut was in June 1999. (SCMP, 22 January)

Penalized past helps bank's future
According to a Bank of China spokesman, the recent investigation and the penalties by regulators are measures taken against the misconduct from 1991 to 1999 by the prior management of the New York branch. Since March 2000, the BOC embarked on the development and implementation of processes to ensure good corporate governance, enhanced information disclosure and the identification of deficiencies in its management and operations. Therefore, the bank has ruled out managerial deficiencies that might cause similar problems. (China Daily, 22 January) This is an excerpt from a front-page article run by several newspapers. It shows Chinese expertise in damage-control and insists that the incidents from the past have nothing to do with the "new" Bank of China under current leadership.

Ill management deals heavy blow to Bank of China
The Bank of China still suffers from poor quality of assets and high expenses despite progress that has been made in its profit-earning capacity and its capital adequacy rate in the past few years. The country's chief auditor made the announcement after overseeing the assets and liability conditions of the BOC headquarters and branches in the year 2000. A series of lending violations and illegal operations involving a total value of RMB 27 billion were discovered. Further investigations into the illicit lending and the former bank president Wang Xuebing will continue. (Business Weekly, 22 January)

Beijing sees growing overseas investment
Beijing is witnessing a rapid influx of foreign investment. Last year, total foreign investment actually used in the year stood at USD 4.01 billion, a hefty growth of 33.2%. The foreign investors included 159 of the world top 500 multinational companies, 19 of whom established their regional headquarters and a big number of research and development institutions in the Chinese capital. (People's Daily, 22 January)

Business executives report pay rises in 2001
A recent survey of business executives in Beijing, Shanghai, Guangzhou and Shenzhen shows 49.7% of managers reported an increase in their income last year, while only 6% reported a decline. According to the survey, Beijing business executives have the highest incomes in China with an average annual income of RMB 90'900, closely followed by Shanghai executives who make RMB 90'700, while those in Shenzhen and Guangzhou are making RMB 87'500 and RMB 84'200 respectively. (People's Daily, 22 January)

Chinese football declared offside
The Chinese football industry is currently embroiled in a severe crisis triggered by a match rigging scandal. Football referees were accused of taking bribes to fix season-ending matches. (Business Weekly, 22 January)

First life insurance Joint Venture to operate in China
Generali China Life Insurance, the first insurance joint venture licensed by the China Insurance Regulatory Commission after China's entry into the WTO, will start operations in Guangzhou this month. (People's Daily, 23 January)

First foreign insurer to operate in Beijing
The Beijing branch of the American International Assurance is preparing to begin business operations in the middle of the year, becoming the first foreign insurer operating in Beijing. (People's Daily, 23 January)

Mainland IT sector sets the pace
China's information technology industry is the world's fastest-growing market and one foreign vendors cannot afford to miss, according to IT research institute Gartner. Gartner expects China's IT industries to maintain an average annual growth rate of 13.5% until 2005, outpacing the rest of the world. Revenue from the mainland IT sector will reach USD 137 billion by 2005, compared with USD 72.7 billion in 2000. (SCMP, 23 January)

Citic industrial plans RMB 10 billion listing
Citic Industrial Bank plans a domestic listing this year to enhance its competitiveness in the mainland's growing financial industry. The bank hopes to raise RMB 10 billion. Citic Industrial Bank is controlled by China International Trust and Investment Corp (Citic Beijing), the mainland's largest trust company. (SCMP, 23 January)

Bertelsmann to set up JV, expand business
German media giant Bertelsmann signed a letter of intent to establish a joint venture printing company with two Chinese partners. The company further plans to break into the still tight-regulated media market by entering the television, radio and e-commerce sections. (www.cbiz.cn, 23 January)

Appeal for end to party line on lenders
The Communist Party should no longer appoint senior positions in state banks, according to Cai Jing, the mainland's top economic magazine. It said a series of scandals had shown the system was no longer viable. The commentary is the first in the mainland press that has looked critically at the implications of Wang Xuebing's dismissal and the issues it raises. (SCMP, 23 January)

46.6% of Taiwanese mainland investments profitable
Taiwan's government said in a report that the mainland was not a huge success story for island businesses, with 41.7% of Taiwan companies investing there losing money and many others close to only breaking even. The Investment Commission said only 46.6% of 1'644 Taiwan companies questioned had profitable mainland investments. (FEER, 24 January)

State-shares: to sell or not to sell
The government's plan to sell State shares to investors to finance its social security system might be revived very soon. The plan to sell a part of them had to be shelved in October again as the value of shares kept on dropping. On average 70% of the shares in listed companies are non-tradable shares held by the government. (www.cbiz.cn, 24 January)

Beijing softens stance on Taiwan
Beijing signalled a significant softening in its Taiwan policy, inviting members of the island's ruling Democratic Progressive Party to visit the mainland and calling for a new system to boost economic ties. (SCMP, 25 January)

EU bans Chinese food imports on contamination concerns
A committee of experts voted Friday to block more than EUR 327 million in Chinese imports of honey, meats and crustaceans into the European Union after an inspection found residues of banned substances, including a potent antibiotic. (Dow Jones Newswires, 25 January)