Swiss exports to China up 22.7%, January to December 2002
In 2002, trade between Switzerland and China was CHF 4.424 billion (up 8.1%). Imports from China to Switzerland stood at CHF 2.197 billion (down 2.2%), exports to China at CHF 2.045 billion (up 22.7%), leaving only a very small trade deficit in favor of China. Swiss exports enjoyed a particularly strong fourth quarter. Machinery again took the lion share (61.6%) of total exports as it increased 19.5% to CHF 1.260 billion. Watches (up 161.4% to CHF 94.2 million) showed very strong growth. Swiss exports to Hong Kong increased 4.9% to CHF 2.997 billion during the same period; imports from Hong Kong decreased to CHF 651 million (down 2.5%). In total, Swiss exports to China (incl. Hong Kong) reached CHF 5.042 billion, representing 3.87% of worldwide Swiss exports. Imports were CHF 2.774 billion. Swiss exports to Taiwan decreased -9.2% to CHF 1.179 billion; imports from Taiwan went down -25.4% to CHF 601 million. (Embassy of Switzerland, 4 Mar) See attached data for details.
Notice: The Embassy now follows the pratice employed by Swissmem, i.e. trade figures are based on so-called "Total 1" of foreign trade, not including precious metals and stones, art objects and antiques. The figures for total trade in Swiss francs may therefore show unusual differences compared to earlier data published in this newsletter.

Economy

Survey shows most Chinese confident about economic outlook
A survey conducted by the National Bureau of Statistics shows that most Chinese people feel confident about the economic prospects in 2003. Nearly 97% a total of 3'000 residents in the country's eastern, central and western urban expressed optimism about the country's economic prospects this year. About 59% of the respondents said they expect a better economic situation this year than last year while 38% expect no significant change. As to family income, 26.6% of the respondents said their family income had increased over the past year, compared with the previous year, while 21.8% said they earned less than the previous year. As for how family income is used, 72% said that most is spent on consumption, 15.1% said that most of their income is invested and 12.9% said that most of their income is deposited in banks. (People's Daily, 7 Mar)

Stress could await China's agricultural sector
China could face mounting pressure in the next few months to allow more agricultural imports into the country, following US Trade Representative Robert Zoellick's visit to Beijing. Due to China's slow growth in farm imports last year, pressure on China to significantly increase its farm product imports is expected to rise remarkably, a senior agricultural economist with the Chinese Academy of Sciences said. (Business Weekly, 5 March)

China's retail sales set to rise 9% in Jan-Feb
China's retail sales for the first two months of this year are expected to jump by 9% over figures for the same period last year. The growth rate is 0.5 percentage points higher than the same period last year, as urban residents have begun to shift their consumption focus from small items worth about CNY 10'000 to larger items valued at CNY 100'000. (China Daily, 4 Mar)

China's GDP to hover at 7-8%despite war
Despite the possible outbreak of a Gulf war affecting world economy, China's economic growth should still attain 7% to 8%, according to Salomon Smith Barney. This is based on the assumption of a 'benign' and quick war in Iraq. (People's Daily, 3 Mar)

Finance

Pension fund rules out overseas investment
The head of the National Council for Social Security Fund has poured cold water on proposals by international players that the fund be allowed to invest overseas for potentially higher returns and a more balanced portfolio. China's fund of last resort to plug provincial social security holes oversees CNY 124.1 billion. Last year, the fund reported a return of just 2.75%. (SCMP, 5 Mar)

Record savings spark concern
Finance experts have responded to the release of record savings-deposit figures by calling for the development of new financial products to help channel more cash into the capital markets. Chinese people's personal-savings deposits hit a record high of CNY 9.81 trillion at the end of January. The amount of deposits was up 20% on a year-on-year basis, the fastest growth rate since 1998. (Business Weekly, 5 March)

Taiwan bank opens office in Beijing
The Taiwan-based Chinatrust Commercial Bank launched a representative office in Beijing, making it the first privately-owned bank from the island to establish an office on the mainland. After getting the green light from relevant authorities in Taiwan, a number of Taiwan-based banks filed documents with the People's Bank of China for permission to establish offices in the mainland market. In May last year, Chang Hwa Bank and the United World Chinese Commercial Bank set up representative offices in Jiangsu Province and Shanghai. (China Daily, 4 Mar)

Interest rate liberalization in the pipeline
The People's Bank of China has made the advancement of liberalized interest rates its priority for 2003. "For the next step, the ceiling on lending rates will be abolished, while the bottom has yet to be determined," Yi Gang, secretary-general of the central bank's monetary policy committee, said. The process of interest-rate liberalization has been progressing according to the following roadmap: The rates for foreign currencies would be freed first and then those for the yuan; loan rates would be followed by deposit rates; long-term and large-volume lending and deposits would have their rates freed before rates for smaller and shorter-term ones. (China Daily, 3 March)

Goldman and Huarong to buy bad loans in joint venture
Goldman Sachs has completed a joint venture agreement with state-owned China Huarong Asset Management to acquire CNY1.9 billion in non-performing loans on the mainland. Conclusion of the deal made Goldman the first foreign investment firm to buy bad loans in China. (SCMP, 1 March)

WTO

Foreign Trade Minister warns of real adverse impact of WTO membership
Foreign trade minister Shi Guangsheng said that the WTO membership did not bring much negative impact on China's economic development and market as expected in the first year. However, Shi warned, "tougher challenges are yet to come." To honor its commitments, China will gradually lower its tariff rates, lift quota control and give foreign competitors wider access to the Chinese market. Internationally, there will be more complaints against China's trade protection while trade friction between China and some other countries is being intensified. "We must continue to do well in our counter measures and seize the opportunities to take up greater challenges," Shi said. (People's Daily, 7 Mar) Sounds a bit like blood, sweat and tears.

Business

Global tourism destinations promoting in China
Swiss tourism operators came on their 6th trip to China. Composed of 21 institutions, they planned to launch workshops in six cities within one week. In 2002, Chinese people spent nearly 120'000 overnight stays in Switzerland, up 25% over the previous year, said Federico Sommaruga, of Switzerland Tourism. He said Switzerland was the first European nation to apply for ADS and the first European nation to open an office in China. He said he believed that as China quickened its pace of opening up, Chinese tourists can conveniently visit the beautiful and rich European nation soon. (People's Daily, 7 March) From a longer article.

Chinese tourists bring vitality to German market
When the first 215 Chinese tourists returned from Germany last week, they found their luggage 50% heavier than when they left. In the 10-day trip, the tourists not only visited famous cities, but also spent over EUR 10'000 buying German leather, sports wear and other items. Wang Yanguang, an official with CITS, believed Chinese tourists had added vitality to German tourism development. (People's Daily, 5 Mar) Let's hope for our German friends, that the EUR 10'000 didn't really make all the difference.

China to launch first plane for private business use
China's first airplane for private business use, "Little Eagle--500", will make its maiden flight in July. Developed by the Shijiazhuang Airplane Industry Co. Ltd and priced to sell at two million yuan, the plane has already attracted Chinese business people. (People's Daily, 5 Mar)

Mainland's TV price wars moving to top-shelf sets
Just as the price war in the mainland's low-end television-set market abated, domestic manufacturers have launched a new round of competition in high-end products. The trend in consumer preference towards high-end products has forced mainland manufacturers into competition with foreign competitors, which still largely control the core technology of optical systems in third-generation TVs and beyond. (SCMP, 4 Mar)

IT

China considers rule favoring local firms in software purchases
In a potential setback for Microsoft, Oracle and other international computer-software makers, China might require its central and local governments to buy most of their software from domestic vendors. If implemented, the rule would limit foreign software makers' access to perhaps the biggest customer in China - a market where software piracy, rather than payment, is the norm. The proposal probably wouldn't fall under the WTO, while it may contravene China's own government-procurement law, some legal experts said. (WSJ, 7 Mar)

Energy

China may OK Russia-China oil pipeline extension
China may agree to a new proposal from Russia to extend a proposed crude oil pipeline to the Pacific port of Nakhodka, on the condition that Russia supplies the previously agreed level of crude to a pipeline planned in China. China's change in position could end a three-month row between the two countries over whether China and Russia would jointly build a USD1.7 billion pipeline from Angarsk to the Daqing oil field in China or Russia building a USD5 billion pipeline stretching to Nakhodka to supply crude to markets in Japan, South Korea and even the U.S. Earlier, Russia had suggested scrapping the pipeline linking Angarsk and Daqing and building the Angarsk-Nakhodka pipeline only, bypassing China completely. (Dow Jones, 3 Mar)

Beijing

Beijing to use 2008 Olympics preparation to improve city
China's capital will use its preparations for hosting the 2008 Olympics to improve its polluted environment and build a more modern metropolis, Beijing's mayor said. (AP, 7 Mar)

Beijing leads China in household assets, income gap
By the end of March 2002, the net assets per household for Beijing urban residents was CNY475'000, 2.08 times of the national urban average level (CNY228'300). The household assets of residents refer to financial assets and assets in kind. Survey showed that the financial assets per household of Beijing residents exceeded CNY130'000. (People's Daily, 3 Mar)

Shanghai

Forbes magazine to bring global CEOs together in Shanghai
More than 350 VIPs in economic, financial and commercial circles all over the world will converge on Shanghai from Sept. 16 to 18 to attend the 2003 Forbes Global CEO Conference, titled "Energizing Global Business: the China Factor". (People's Daily, 7 Mar)

Name right for China's first Maglev train auctioned
Shanghai Sinhoo Real Estate Co. Ltd, is a subsidiary of Zhejiang Sinhoo Co. Ltd, won the right to name China's first maglev train, for a price of CYN 20.9 million. The winner will enjoy the right to name the train fortwo years and will be entitled to advertise in the train over the same period. A specific number of seats on every train will be reserved for the winner. (People's Daily, 6 Mar)

Various

Coca-Cola to give China a taste of the real thing
After years of reliance on cane sugar as a sweetener for its mainland-made product, Coca-Cola is about to switch to high-fructose corn syrup - a processed sweetener used in most countries around the world. The move is driven by health concerns in the West. (SCMP, 8 Mar) For those of you who care…

China's surveillance of online content slows access
China's tens of millions of Internet users are suffering sharp slowdowns in access, which industry experts blame in part on heightened efforts by the communist government to police online content. The slowdown highlights the clash between China's efforts to reap the Internet's benefits and communist zeal to control what its people read and hear. Problems emerged in October after "packet-sniffer" software was installed that briefly holds each chunk of data to be screened. Beijing has built an online barrier around China, requiring traffic in and out to pass through just eight gateways - a step that heightens official control. (AP, 6 Mar)

South-North water diversion project heading for early finish
The eastern section of China's massive water diversion project from south to north will be completed by 2007, one year earlier than scheduled. The timetable for the USD 59 billion project is to link Shandong with the Yangtze River, China's largest waterway, by 2008. The whole project covers three routes. The first two will be up to 1'800 kilometers in length and link Beijing and other northern industrial cities with the Yangtze. A third, to be finished by 2050, will cut through the high mountains near Tibet to link the Yangtze with the headwaters of the Yellow River, which chronically dries up with overuse. (People's Daily, 5 Mar)

China ready for lunar mission
China could send its first unmanned probe to the moon within the next two and a half years, a leading scientific official has revealed. (China Daily, 3 March)