Nestle celebrates birthday
Swiss-based Nestle Group, the world's largest food company, celebrated the 10th anniversary of its NESCAFE factory in Dongguan, South China's Guangdong Province. The factory is part of Nestle Donguan Ltd, a company now wholly owned by Nestle. Nestle has committed more than CNY 50 million to agricultural technical assistance for coffee growing in Southwest China's Yunnan Province since 1992. (Business Weekly, 10 Dec)

Economy

Nation's consumer price index continues to fall in Nov
The Chinese economy continued to suffer falling prices in November. CPI dropped 0.7% compared with the same month of last year. For the first 11 months, the CPI fell 0.8% from a year ago. (China Daily, 14 Dec)

China Jan-Nov exports up 21.6%
China's trade surplus expanded to USD 27.2 billion for the first 11 months of the year, as exports and imports posted double-digit year-on-year growth. Exports rose 21.6% on year to USD 293.7 billion in the January-November period, a slight acceleration from the 20.6% growth recorded for the January-October period. Imports rose 20.5% to USD 266.5 billion, also accelerating from the 18.7% growth rate for January-October. (Dow Jones, 12 Dec)

China industrial output rises as export production booms
Industrial output in China last month grew by a faster-than-expected 14.5% from a year earlier, indicating domestic demand continues to power the nation's economy. After hovering in the 11% to 12% range for most of the year, growth in China's industrial output expanded during recent months, rising 13.8% during September and 14.2% during October. The rapid growth was driven by production of automobiles, electronics and telecommunications equipment. While car makers are increasing production in response to booming domestic sales, much of China's electronics output is made for export. (Dow Jones, 10 Dec)

Economic work conference reaffirms current policy
The annual economic work conference of the new 24-member Political Bureau of China's Communist Party reaffirmed the country's current expansionary fiscal and stable monetary policies. The conference also forecast that China's GDP will top CNY 10 trillion this year. (Dow Jones, 10 Dec)

WTO

China's first year in WTO hailed as success
Foreign Trade Minister Shi Guangsheng used the word "best" twice when describing the first year of China's membership in the WTO. Foreign trade volume and overseas investment in China achieved its "best" figures in years, and as a new member, China has proved the "best" player of the multilateral trade body. China's WTO membership enabled it to better handle trade disputes and to gain better access to the world market. It has also helped accelerate the country's move towards a market economy, and equipped economic officials and entrepreneurs to compete on the world stage, all of which stands to benefit China in the long term. Shi stressed some industrial sectors that had been the subject of concern, such as the automobile and service industries, have survived the challenges from foreign competitors. There was also no flood of foreign imports. China's performance as a new WTO member was "great," he said, adding China had fulfilled its commitments and observed the rules. (China Daily, 10 Dec)

US highlights problems with China WTO compliance
In its first annual report to Congress on China's compliance with its WTO commitments the Bush administration said China had made significant progress during its first year in the WTO, while slow implementation of some commitments raised "serious concern." Apart from general worries about a lack of transparency in new Chinese regulations, "three other areas generated significant problems and warrant continued scrutiny - agriculture, intellectual property rights and services," the report said. U.S. business groups generally have given China a mixed grade on its first year. While praising Beijing for implementing a host of new regulations to honor its commitment, they complain they have not seen as much new market access as promised. (Reuters, 11 Dec)

Finance

Interest payments take a toll
China's asset-management companies trying to dispose of bad bank loans are coming under interest-payment pressure as they move gradually to resolve the debts while their cash recovery is just barely enough to pay for accrued interest. (FEER, 19 Dec)

China set for all-clear on auto financing
China's fast-growing car market will get a boost with the passing of regulations approving the establishment of local and foreign auto financing firms. According to Long Yongtu, a vice-minister in Moftec, the regulations would be in place "early next year". Chinese banks, which have been allowed to do auto financing since 1998, made car loans worth CNY 50 billion in the first nine months of this year, up more than 170% from the same period in 2001. (FT, 12 Dec)

Mainland lender posts 65% rise in mortgage loans
China Construction Bank, the mainland's leading housing lender, has reported a 65% increase in mortgage loans this year. Mortgage loans to individuals this year will exceed CNY 300 billion, up from CNY 187 billion last year and CNY 135.7 billion in 2000. People are being forced to buy their own homes because their work units no longer provide subsidised housing and large redevelopment schemes are demolishing old housing in city centres. (SCMP, 12 Dec)

China's money supply grows steadily
By the end of November, the outstanding broad money (M2) was CNY 17.97 trillion, up 16.6% from the corresponding period last year, while that of narrow money (M1) was CNY 6.8 trillion, up 18.5%. The outstanding amount of money in circulation (M0) was CNY 1.63 trillion, up 10.6%, while the net input of cash in the month was CNY 33.2 billion, or CNY 3.7 billion more than the same month last year. At the same time, outstanding RMB deposits totalled CNY 16.86 trillion yuan, up 20.1% from the same period last year. The outstanding loans were CNY 12.86 trillion, up 15.7% in constant terms. (China Daily, 11 Dec)

Hannover Re to seek licence
Hannover Re, the world's fifth-largest reinsurer by assets, is preparing to file documents seeking approval to open a wholly owned branch in the country. The world's two largest reinsurers by assets - Swiss Re and Munich Re - earlier this year received approval to open wholly owned branches in China. Swiss Re plans to open its branch in either Beijing or Shanghai early in the new year to develop China's life and non-life reinsurance businesses. (Business Weekly, 10 Dec)

More private firms opt to float overseas
A new wave of Chinese IPOs is expected on global capital markets next year. Besides the massive State-owned enterprises, more private companies will join the selling spree. China's private sector contributes over 30% of China's GDP, but accounts for only 3% and 22% of China's total overseas listed companies in terms of market capitalization and numbers. China's stock market seems to be designed to help reform SOEs and the listing requirements are too strict for those small and medium-sized enterprises. (Business Weekly, 10 Dec)

Bonds not enough to end cash shortage
In the first 11 months of this year, actual corporate debt sales have reached CNY 23.5 billion, up 60% compared to the whole of last year. However, the bond market is still dominated by large SOEs. Corporate Law stipulates that for enterprises to be eligible to issue bonds they must have a registered capital higher than CNY 30 million, much higher than the registered capital of most private entrepreneurs. A national survey indicated that in 2001, 80% of private enterprises could not obtain stable investment. Only 21% of China's 2 million private firms obtained bank loans last year. (Business Weekly, 10 Dec)

China's first-11-month tax revenue tops USD 180 billion
China's tax revenue rose year-on-year 13.6% during the first 11 months of 2002. The country's total tax revenue reached RMB 1'551.8 billion during the period, an increase of 13.6% compared to a year ago. Experts say China loses CNY 30 billion in revenue each year due to tax evasion by multinational firms alone. (China Daily, 10 Dec)

China province launches tax evasion crackdown
Hebei province has collected files on 250'000 lawyers, entrepreneurs and others in a crackdown on tax evasion by the rich. The campaign is an attempt to soothe public anger at the growing gap between rich and poor in China, where many who have benefited most from economic reform slip through its crude tax system. (Dow Jones, 7 Dec)

Legal

Auto JV foreign stake limit unchanged
China will not allow foreign automakers to control more than a 50% stake in JVs targeting the domestic market. The equity structure requirement is seen as the last resort to protect local manufacturers as the nation is cutting its tariffs on auto imports and will remove other non-tariff barriers to foreign automakers under WTO obligations. China has made no commitments to the WTO regarding the equity arrangements of auto JVs. (Business Weekly, 10 Dec)

Business

Starbucks planning big push to convert China's tea-drinkers into latte lovers
Starbucks has a bold ambition to expand its stores in Asia to 6'000 from about 600, with a large number of those opening in the Greater China region. China has 62 Starbucks, most of them in the wealthier cities of Beijing and Shanghai. (SCMP, 14 Dec)

Energy

China's power needs to outstrip world rates
China will see some of the world's highest growth rates in the demand for oil and gas, driven by rising car ownership and power generation volume. ExxonMobil forecast China's oil demand would grow an average 4.5% a year until 2020, compared with the world average of 1.7%. Natural gas demand is forecast to rise an average 8% a year in the period, higher than the world average of 2.6%. Gas is projected to account for 8% of China's energy consumption by 2020, up from about 2.7% now. (SCMP, 14 Dec)

Beijing

Beijing bans Internet cafés on main street
Beijing has banned Internet cafés on Chang'an Ave. A city ordinance also bars such establishments within 200 meters of CPC, government and military buildings. It also stipulates that an Internet café must have no less than CNY 500'000 in registered capital. To stay in business, it needs to meet fire safety requirements, have at least 80 computer terminals, and at least 2.5 square meters of user room for each computer. (ChinaOnline, 12 Dec)

LG sets up largest overseas R&D center in Beijing
LG Electronics launched its China research and development centre in Beijing. The centre will be LG's largest research base outside its headquarters in Seoul. It currently employs more than 100 engineers and researchers, and the number will expand to 1'600 by 2005. (China Daily, 11 Dec)

Is indoor ski resort treading on thin ice?
Private investors are planning to build the world's largest indoor ski resort in Beijing. The resort will cost CNY 1 billion and encompass 132'000 square metres. A survey conducted by Beijing Four Season Ski Co Ltd, the project's developer, found China has more than 90 outdoor and indoor ski resorts. More than 2 million people visited these resorts, which raked in more than CNY 1 billion in sales revenues last winter. Experts suggest the rapidly growing industry will have a difficult time attracting customers as there are few ski enthusiasts in China due to the newness of the industry and residents' relatively low living standards. (Business Weekly, 10 Dec)

Shanghai

Alcatel opens R&I centre in Shanghai
Alcatel Shanghai Bell, the leading Chinese telecom technology supplier, opened its research and Innovation centre in Shanghai. The centre is Alcatel's first R&I centre in the Asia-Pacific and one of six worldwide. (China Daily, 11 Dec)

Various

Chinese miners' family held after officials attacked
Relatives of 30 coal miners killed in a fire in northeastern China were detained in government hostels and hospital wards after they attacked mine officials, according to the China Labor Bulletin, a group based in Hong Kong. (Dow Jones, 13 Dec)

Quality control for journalists
China plans to introduce mandatory tests next year for all domestic journalists, plus detailed guidelines for new media outlets. The government said the measures were aimed at boosting professionalism and competitiveness. But the plans triggered concern among some industry executives that the mainland government could use the rules to tighten its grip on the media. (FEER, 19 Dec)

Next Miss World Pageant to be held in Hainan
The Miss World pageant, dogged by controversy after deadly religious rioting in Nigeria this year, will turn to Hainan island for its 2003 competition. "It is spectacular," said Julia Morley, the Miss World chairwoman, "It is like Hawaii." (Dow Jones, 10 Dec)

Guangdong gourmets eat 10'000 cats a day
The huge demand for cat meat in Guangdong has fuelled a debate over the practice of eating pets. A controversial article in the Guangzhou-based Yangcheng Evening News has claimed that 10'000 cats are eaten in the province every day. Older cats are said to taste the best and are believed to keep those who eat them warm in the winter. Cat lovers in Shenzhen have launched a campaign to stop the inhumane treatment of the animals. (SCMP, 4 Dec) That one is for the dog enthusiasts among us.