Holiday boost no longer enough to spur economic growth
For the past few years, the Chinese government has used a novel approach to boost consumer spending - longer holidays. But the economic boost from the policy is waning. Government investment will be a main driver of China's economy again in 2002, say economists. (ChinaOnline, 11 February)

Minsheng Bank hit with scandal
A loan officer at the Shanghai branch of Minsheng Bank - regarded as the most successful private bank in China - was recently charged with defrauding the financial institution of more than RMB 350 million. Local officials said it is one of the largest financial scandals ever to hit Shanghai. (ChinaOnline, 11 February)

Shanghai banks slow down in issuing individual consumer loans
Commercial banks in Shanghai have scaled back such loans because of increasing risks and diminishing profits. Bank officials term the cutback normal, saying it is a result of the banks' efforts to reduce lending risks and maximize profits, but some analysts opined that under Shanghai's immature credit system, banks dare not lend money at all, even though they have surplus deposits. (ChinaOnline, 11 February)

China import quotas on grains don't guarantee market access
China's tariff-rate import quotas on grains and oilseeds for 2002 were finally, but grain market participants said the quotas don't guarantee it will import the total volume of grains stipulated under the quotas. Actual Chinese grain imports this year will continue to depend on domestic production and how the standoff between the U.S. and China on genetically- modified crop rules works out. (Dow Jones Newswires, 11 February)

China's bonded zones to become free trade zones
China plans to turn its bonded zones into free trade zones in the future, according to recent national conference on the issue. Currently, there are 15 bonded zones throughout the country. (People's Daily, 11 February)

Short messaging becomes popular New Year trend
Sending short text messages via cellphones has become increasingly popular. The number of such messages sent by Beijing residents during the Spring Festival is estimated to reach over 100 million. (ChinaOnline, 12 February)

Foreign investment soars in January
In January, China approved the setting up of 2'370 overseas- funded businesses, a year-on-year growth of 45.5%, according to the MOFTEC. Total contractual foreign investment reached USD 7.187 billion, up 47.97%. The realized foreign investment in January was USD 2.966 billion, a 33.54% increase. (People's Daily, 12 February)

Mainland offers bright spot for capital
Private capital flows to emerging markets are at their lowest in a decade, except for China which is seeing record investment. Last year, China accounted for more than 80% of the net direct investment in Asia. Equity placements in Asia were only USD 8.8 billion, compared with USD 28.5 billion in 2000, of which almost half represented flows to China as the country sold shares in large public enterprises. China benefited as investors sought diversification from the economic slowdown in industrialized countries. (SCMP, 15 February)

Auto makers may rethink their strategy in China
Just when foreign car makers thought they might start turning a decent profit in China, a price war breaks out. It makes you wonder: Does it make sense anymore for a foreign company to build a car factory in China (if it ever did)? Car making is all about scale and capital-intensive manufacturing. Labor costs are pretty unimportant for mainstream models. A lot of foreign auto makers have experienced some spectacular disappointments in China over the past two decades. But top companies with sufficiently deep pockets owe it to their shareholders to make a serious run at China simply because of the immense potential it holds. Now, however, comes China's entry to the WTO, and the math that persuaded companies to set up in China if they wanted to sell there has changed. Says one expert: "in the long term I suspect it will be a graveyard for them all." (AWSJ, 15 February) The original article is much more detailed.