China's earliest SEZ to undergo expansion
Shenzhen is to build seven new towns outside its existing special economic zone in the next decade. Each new town would have its own distinctive architectural features and should be able to earn RMB 10 billion in GDP and RMB 1 billion in revenue. The new towns would be constructed with infrastructure capable of sustaining 500'000 people. Shenzhen SEZ, founded in 1980, is the earliest and most successful of the country's five special economic zones. (People's Daily, 27 April)

Deutsche Post to invest in China
According to the magazine "Der Spiegel", Deutsche Post wants to invest more than EUR 1.5 billion in China over the next two to three years. (People's Daily, 28 April)

China Central Bank to keep interest rates stable
China's central bank's monetary policy committee said it plans to keep deposit and lending rates stable. It also suggested that "interest-rate marketization reform" should continue to be pushed, adding that the lending rate to small- and medium-sized companies should fluctuate within a larger band. (Dow Jones Newswires, 28 April)

China confronts grim job situation
In the coming four years, China is likely to experience the most serious unemployment pressures it has ever faced, with the country expecting to see the jobless numbers rise to more than 20 million. China may see an annual average of 12 million to 13 million new workers entering the labour market over the next few years, in addition to 5 million workers laid off by State-owned enterprises and 6.8 million registered jobless people by the end of last year. There are also about 150 million surplus rural labourers who are flooding into cities looking for jobs. (China Daily, 29 April)

Rush on luxury apartments in China hints at emergence of high-end market
A batch of luxury apartments in Beijing sold out to mostly Chinese citizens in just days, surprising the developers and highlighting potential opportunities in the city's high-end housing market even as overall Beijing real-estate prices sag. Until recently, luxury residences in Beijing have been targeted primarily at expatriate renters. (WSJ, 29 April)

China's State Council sets target for employment, social security
China's State Council issued a major report on employment and social welfare, which sets a target to keep rural and urban unemployment rates "within 5%" and to introduce basic social-security systems for the majority of workers. The government's policy statements are notable for two things: the frankness with which they address the politically explosive issue of mass unemployment, and their embrace of the private sector as the solution. The proportion of workers in China's state sector has fallen dramatically from 99.8% of the total urban work force in 1978 to 37.3% in 2001. (WSJ, 29 April)

China's Telecom regulator cracks down
China's telecom regulator has launched a crackdown on telecom employees who commit criminal attacks against competing operators. The move follows reports of an incident in Sichuan province, where China Telecom Group employees broke into the facilities of competitor China United Telecom Corp. and ripped out phone cables. (AWSJ, 30 April)

Fixed-line service slumps in rural areas
Fixed-line telecom service losses in the countryside increased even more in the first quarter of the year. 2.819 million residents in the countryside installed fixed-line telephones in the first quarter, a 41% drop compared to the same period last year. Revenue from fixed-line telephones in the countryside continued to drop to a total of RMB 4.78 billion in the first three months. (China Daily, 30 April)

Conglomerates best medicine for survival
China plans to create up to 10 giant medicine distribution companies within the next five years. The companies will target both domestic and overseas markets. Currently, there are around 17'000 medicine wholesale companies in China. Only 10 of them have annual sales of more than RMB 1 billion. There are around 120'000 medicine retailing companies in the nation. (Business Weekly, 30 April)

Big brokers agree to pricing pact
The mainland's seven biggest stockbrokers have pledged not to engage in "improper price cutting" in the midst of a price war that has sent commissions tumbling. Smaller brokers have been slashing commissions to attract business in a prolonged stock market slump. (SCMP, 1 May)

More firms in red
The mainland's annual reporting season closed with nearly 13% of Shanghai and Shenzhen-listed companies in the red, against the previous year's 8.71%. Average earnings per share of the 1'173 mainland-listed firms thinned by 32.84% to 13.6 fen. Slipping export growth and serious domestic overcapacity eroded the profit margins of domestic firms. (SCMP, 1 May)

China recognizes local entrepreneurs as model workers
With China's communist government increasingly embracing private business, four private business owners have been honored this year as "model workers" - a title previously reserved for toilers in state farms and factories. (Dow Jones Newswires, 1 May)

Guangzhou fair forecasts fine prospects for China's foreign trade
Signs suggest that China's foreign trade this year will be better than expected. Sources from the 91st China Export Commodities Fair said that a record 120'576 people visited the fair, up 18.9% from the previous one. Business deals worth USD 16.85 billion were struck, up 26.7%. (People's Daily, 3 May)

Study highlights poor market controls
A study by the Shenzhen Stock Exchange has found that low detection rate of fraud and lenient punishment had led to repeated offences by violators and a culture of dishonesty. The finding dealt another blow to securities regulators, who have been lambasted by a wide spectrum of interest groups - from minority investors to senior lawmakers - for their lacklustre performance. (SCMP, 3 May)

JP Morgan bullish on China market
According to the China Research division of JP Morgan, institutional investors have predicted that China's economy and the H-shares and Red chip markets are on the verge of a rally. "Domestic consumption would offer a strong growth potential towards the second half of this year, and sectors benefiting most from deregulatory changes include telecom, power, airlines, and oil and gas - the four pillar industries." (China Daily, 4 May)

China becomes world's fourth-largest trade economy
A report by the WTO indicates that China has for the first time overtaken Canada to become the world's fourth-largest trade economy after the EU, the US and Japan. The report was based on each country's data on import and export of commodities and services in 2001. China's trade volume exceeded the sum of those of the Middle East, Africa and Latin America excluding Mexico. (ChinaOnline, 6 May)

Money poured into water cleanup
The Ministry of Science and Technology will invest RMB 350 million to push the fight against water pollution across the country. China's efficiency in treating domestic waste water is less than 20% on average, much lower than the average 80% in some developed countries. (China Daily, 8 May)

Auto merging on the horizon
The central government is mapping out a merger plan between China's top three automakers - First Automotive Works, Shanghai Automotive Industry Corp and Dongfeng Motor Corp - and three other less competitive counterparts. According to a five-year plan, the government plans to create two to three international competitive auto groups. (Business Weekly, 8 May)

Holiday makers drum up Beijing economy
Beijing earned RMB 3.44 billion during the May Day holiday, 94.1% of which came from tourists. Cars, electric appliances and food sales were also the three highlights. (China Daily, 9 May) The speed of those local statistics is truly awesome.

Order of account opening stressed
In a report presented at the Asian Development Bank annual conference, economists stressed the need for the appropriate sequencing of China's financial liberalization and capital account opening and also proposed a comprehensive reform package. The report recommended a carefully staged interest-rate liberalization. (China Daily, 9 May)

Skills shortage creates crisis
An extreme shortage of skilled labor is hampering the mainland from becoming the world's largest manufacturing centre. According to official statistics, only 70% of products made are up to standard. Products of a shabby quality had caused the country economic losses of up to RMB 200 billion. While many university graduates and even post-graduate degree holders remain jobless, employers cannot find enough skilled blue-collar workers. (HKiMail, 9 May)

Olympic Games
China and the International Olympic Committee held their first working session, kicking off formal preparations for China's 2008 Summer Games. The chairman of the IOC Coordination Commission praised progress to date. (FEER, 9 May)

Overall value of SOEs drops due to restructuring
The overall value of state-owned and state-holding industrial enterprises has dropped 23% during the 1991-2000 period to account for only 42% of the country's total industrial value. (Xinhua, 9 May)

Doubt cast on debt strategy
Mainland banks would need a massive USD 518 billion capital injection to haul bad loans down to 15% in a "big bang" approach, according to Standard & Poor's. Official estimates that the sector's NPL ratio was 30% meant problem loans amounted to USD 406 billion out of total lending of USD 1.35 trillion at the end of last year. But a more realistic estimate of 50% meant problem loans were more likely to be USD 677 billion. (SCMP, 10 May)

Beijing simplifies procedures for fixed assets investment
Beijing will simplify the procedures for approving fixed assets investment projects. The examination and approval period will be shortened from 480 days to 60 to 180 days. Previously, the procedures for approving fixed assets investment projects in Beijing were quite complicated, involving more than 30 governmental departments. Now, "one-stop" offices had been set up in 18 districts and counties. (People's Daily, 10 May)

Chinese banks' 1st-quarter results don't touch on underlying issues
On the face of it China's four major state-owned commercial banks haven't looked better. In the first three months of this year, earnings are up and bad loans are down. But first-quarter earnings don't reflect the reality of China's banking system, analysts say. Year-end taxes and bad loan provisions will drastically reduce healthy results. (Dow Jones Newswires, 10 May)

Swiss Life withdraws from China
The insurer Swiss Life has pulled the plug on its planned expansion in China, preferring to concentrate on its core European markets. The company said it had already closed its representative office in Guangzhou and was in the process of closing another in Beijing. The company ran into trouble after an expansion drive cut into profits. (swissinfo, 10 May) This news item was also widely distributed by Xinhua News Agency.

Chinese customs revenue drops
Duty collected by Chinese customs totaled RMB 74.16 billion in the first four months of 2002, down 7.74% year on year and ending three years of fast growth. Experts attributed the drop mainly to the considerable tariff rate decrease after China's accession to the WTO. (People's Daily, 10 May)

35th ADB Annual Meeting in Shanghai
The three-day Annual Meeting of the Board of Governors of the ADB will discuss such topics as the economic and financial situation in the Asia-Pacific region, the outlook for development and problems faced by regional development. (People's Daily, 10 May)

Finance Ministers meet in Shanghai
Finance ministers of the ten members of the ASEAN and China, Japan and the Republic of Korea gathered in Shanghai for the fifth finance ministers' meeting of the ASEAN "ten plus three" group. The meeting discussed global and regional macroeconomic situations and ways to cement financial cooperation in east Asia. (People's Daily, 11 May)

Stable environment cuts capital flight
China's capital flight slowed last year as a key indicator - the errors and omissions on its balance of payments - hit a record low of USD 4.85 billion. China's illegal foreign exchange outflows peaked during the Asian financial crisis when there were widespread expectations that Beijing would devalue the yuan. Some government economists estimated the size of China's capital flight at USD 53 billion between 1997 and 1999. (SCMP, 11 May)

Listed firms face sweeping review of corporate governance
China's 1'170-odd listed companies face a sweeping review of corporate governance starting this month. Combining the firms' self-examination with targeted inspections by the China Securities Regulatory Commission, the review will turn the spotlight on listed companies' financial and personnel ties with their often state-owned controlling shareholders. (SCMP, 11 May)

Weekly Market update		10 May 2002	26 April 2002
Shanghai A		1711.10	1713.26
Shanghai B		142.93	144.60
Shenzhen A		506.45	501.57
Shenzhen B		223.15	226.81
Hong Kong Red Chip		1326.24	1294.40
Hong Kong H		2069.00	2077.67
Source: South China Morning Post