NEWSLETTER No 21, February 5, 2007
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ACTIVITIES & MEMBERS' NEWS China's mushrooming legislation – 9 February 2007 – Brussels – On February 9, 2007, from 10 a.m. to 12 p.m., at Louizalaan 106, Brussels, DLA Piper, in cooperation with the Flanders-China Chamber of Commerce, is organizing a conference titled “China's mushrooming legislation – what's a law worth?”. The presentation on the developments of Chinese legislation and its possible impact on foreign investment will be given by Jingzhou Tao, partner at DLA Piper's Beijing office. To register, please e-mail by February 7 to: . Min Wu Xu – 10 February 2007 – On Saturday, February 10, 2007 at 8 p.m. at the Center for Fine Arts, Terarken, Min Xiao Fen, Wu Wei, and Xu Fengxia, three pioneers of the Chinese avant-garde, are joining forces in the quest for a modern musical idiom with its roots in the old Chinese tradition. Their program of solos and trios combines classical Chinese music with compositions - their own, in some cases - and improvization. The complete Chinese instrumental line-up consists of pipa (lute), electric pipa, sheng (mouth organ), erhu (violin), xun (ocarina) and guzheng (zither). The Centre for Fine Arts in Brussels offers 5 free tickets for 2 persons. Take your chance now and send an email with your name and address to and mention “Min Wu Xu” in the subject. Five winners will be drawn by lot. Chinese New Year Reception - 15 February 2007 – Brussels – On 15 February 2007 at 18.30 h. at the Résidence Palace, Wetstraat 155, Brussels, the Chairman and Members of the Board of Directors of the Flanders-China Chamber of Commerce are delighted to invite you to a Chinese New Year Reception with New Year's addresses by FCCC Chairman Bert de Graeve, Ambassador of the People's Republic of China in Belgium, Her Excellency Mrs Zhang Qiyue and Vice-Minister-President of the Flanders Government and Flemish Minister of Economy, Enterprise, Science, Innovation and Foreign Trade, Mrs Fientje Moerman. Ambassador and Head of the Mission of the People's Republic of China to the European Union, His Excellency Mr Guan Chenyuan will be present at the reception. Participation is free of charge for members of the FCCC, non-members €25. Please reply by February 9, 2007 to. Economic mission headed by HRH Prince Filip to the People's Republic of China and Hong Kong (June 16 to 26, 2007) – In the framework of the cooperation agreement between the federal government and the regions, a common economic mission to the People's Republic of China and Hong Kong will be organized from June 16 till 26, 2007, presided by HRH Prince Filip, Honorary Chairman of the Agency of Foreign Trade.
This mission is organized by the Agency of Foreign Trade in close cooperation with the regional services for export promotion (Awex, Brussel Export and Flanders Investment & Trade – FIT).
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The Belgian delegation will visit Beijing, Shenyang, Hong Kong and Shanghai in this order, where the economic and trade councillors will prepare individual contacts at the request of the companies. It is possible to participate in the whole mission or in the shorter program starting in Hong Kong. The official delegation will also visit Chengdu for one day. No company contacts will be organized in Chengdu.
The mission is open to all sectors. Considering the specific characteristics of the Chinese market, special emphasis will be put on a number of key sectors, including logistics, food, horticulture and environment, the services sector, capital equipment, the glass sector, construction, IT and the World Expo Shanghai 2010.
If you are interested to participate in this mission or if you wish to receive further information, please return the form below as soon as possible to the contact persons of the services for foreign trade of the region where your company is located:
● Mrs Annik DU PONT of Flanders Investment & Trade Tel : 02 5048709 - Fax : 02 5048895 - Flemish companies can register directly at(just click)● Mrs Isabelle LAVERGE of Brussel Export Tel : 02 8004085 - Fax : 02 8004001 - ● Mr Laurent PAQUET voor AWEX Tel : 02 4218502 - Fax : 02 4218775 -
Deadline for registration is end February.
Naam van de onderneming, federatie, bank:. Adres:. Woonplaats:. Postcode:. Vertegenwoordiger:. Tel:. Fax:.…. E-mail:.
<> heeft belangstelling om aan de economische zending naar China en Hongkong deel te nemen en wenst meer informatie te ontvangen i.v.m. de deelnemingsvoorwaarden.
Chinese Law Chair launched at VUB – The Brussels Institute of Contemporary China Studies (BICCS) at the Vrije Universiteit Brussel (VUB) has launched a Chinese Law Chair. Knowledge of Chinese law is becoming ever more important as Chinese companies sometimes request that Chinese law is used in litigation. The Chinese Law Chair is launched in cooperation with Mr Martin Aps, a lawyer in Antwerp who is specialized in assisting Belgian companies on the Chinese market. BICCS wants to promote scientific research and education in Chinese law.
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BUSINESS NEWS ROUND-UP New rules on investment trusts published – The China Banking Regulatory Commission released revised rules on investment trust companies. The minimum investment in a trust investment plan is CNY1 million by any individual, legal person or organization. A trust company needs to have a registered capital of at least CNY300 million. NPLs down at shareholding banks – The China Banking Regulatory Commission (CBRC) announced that non-performing loans (NPLs) at China's 12 shareholding banks fell to 3% last year from 4.8% in 2005 to CNY99 billion. Bad loans at the more than 110 city commercial banks fell to an average 6% at the end of last year. Foreign banks preferred – An online survey by China Daily showed 57% of the 1,329 respondents plan to move their deposits from domestic to foreign banks when locally incorporated foreign banks start renminbi retail business in the coming months. Most customers who want to transfer their deposits expect foreign banks to provide better service and to be safer. Many also complained about long waiting times at Chinese banks. Loan and deposit growth at commercial banks in China is expected to slow down this year as more deposits are diverted to buy stocks.
Less than 4% of China's 1.3 billion people have insurance coverage.
When a 25% uniform corporate tax rate is introduced, probably on January 1, 2008, the profits of domestic banks are expected to increase 8% to 12% as a result. Agricultural Bank of China (ABC) aims to complete its financial restructuring, including a USD25 billion to USD30 billion capital injection by the end of the year, before launching an IPO and attracting foreign investors. Huaxia Bank's profit rose 13% to CNY1.46 billion last year. FOREIGN INVESTMENT State Investment Company to be set up – China Securities Journal reported that the Chinese government will set up the State Foreign Exchange Investment Company to better utilize the country's foreign exchange reserves. The company would issue renminbi bonds to purchase foreign exchange reserves from the State Administration of Foreign Exchange (SAFE). This would help reduce the excessive money supply. Hershey and Lotte Confectionery will set up an USD80 million joint venture to make chocolate in China. Lotte estimates China's chocolate market to be worth USD600 million and doubling annually.
Guangzhou Pharmaceuticals Corp and Alliance Boots have set up a 50-50 joint venture to operate 29 retail pharmacies. FOREIGN TRADE U.S. launches case against China at WTO – The U.S. filed a case against China with the World Trade Organization (WTO) complaining about unfair government subsidies and tax policies to bolster Chinese firms in competition against foreign firms. If a two-month
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consultation period does not lead to a resolution, a panel of experts will be formed to handle the dispute. Many export tax rebates have been cancelled or reduced, but some remain.
U.S. Assistant Secretary of Commerce Chris Padilla has said the U.S. is willing to facilitate exports to China of the 47 items on the export control list if China makes it easier for U.S. inspectors to check their use.
Exports of Chinese textiles are expected to rise 15% to 20% this year, according to China's Ministry of Commerce. But the slow appreciation of the yuan could erode already low profit margins. MACROECONOMY Farm land not to be privatized – China has no intention of privatizing land, because the constitution does not allow it and it is therefore not up to the government to decide, Chen Xiwen, Director of the government's Rural Work Office has said at a press conference. China's rural land is collectively owned and allocated to farmers in plots on 30-year leases. Farmers are not allowed to use the land as collateral for loans or to sell it. In some provinces trial sales of land use rights have been made. Leasing land from farmers for construction purposes is illegal. Seizures of land without compensation and resettlement are a key source of instability in rural areas. Investments of SOEs to be controlled – The State-owned Assets Supervision and Administration Commission (SASAC) has required major state-owned enterprises (SOEs) to file monthly reports on all fixed-asset investments, in order to curb wasteful spending. The 445 key state-owned enterprises recorded profits of CNY889 billion, an 18.6% increase from a year earlier, on revenue of CNY10.38 trillion, up 19.3%. Guangdong once again sets low growth target – Guangdong Governor Huang Huahua has for the third time in four years set an economic growth target of 9%, although all previous targets were surpassed. The governor also wants a 3% reduction in energy consumption and at least a 2% reduction in total polluting substances. Urban disposable income is expected to rise by 8% and rural income by 5.5%. He also promised subsidies to poor areas in the province and compensation for land seizures.
National Development and Reform Commission Secretary General Han Yongwen said the government would strengthen macroeconomic controls this year to ensure slower economic growth than last year's 10.7%. Industries such as steel, cement and coal will be subject to continued controls.
People's Bank of China Governor Zhou Xiaochuan said the central bank is closely monitoring rising property and stock prices, believed to be fueled by excessive liquidity in the country's banking system. Chinese Academy of Social Sciences economist Yi Xianrong recommended raising interest rates.
The scale of Shanghai's pension fund scandal became clear when the head of the city's procuratorate announced that more than 20 people, including 11 government officials, have been implicated and at least seven have been handed over to the judiciary.
The number of private enterprises rose 15% to 4.95 million in 2006. Private companies account for 57% of all enterprises and employ 64 million people.
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MANAGEMENT Guangdong cracks down on wages fraud – About 30 employers, including at least two from Hong Kong, were arrested in Guangdong last year and charged with failing to pay wages owed to their workers. Guangdong is the first province to use criminal charges to crack down on wage defaulters. Guangdong's labor authorities last year had recovered about CNY1 billion in wages owed to about 1 million workers in 21,900 back-pay cases. Lawyers' network to help migrants – The United Nations Development Program (UNDP), the All China Lawyers' Association and the China International Center of Economic and Technical Exchange (CICETE) are establishing legal aid service centers in 15 provinces focused on the problems of China's 120 million migrants. The Belgian Embassy is providing financial support. Veteran Lawyer Tong Lihua will lead the network. “With the financing of this network, Belgium is willing to contribute to the efforts of the Chinese government in the field of promotion of human rights, good governance and rule of law”, commented Bernard Pierre, Ambassador of Belgium.
U.S. law firm McDermott Will & Emery has formed a strategic partnership with Shanghai's Yuan Da. Both firms will share clients and assist each other in their own areas of expertise. Foreign firms are not allowed to practice Chinese law but may advise clients.
Accountant firm Deloitte expects a 30% rise in its business when the unification of corporate income tax is implemented. More companies are becoming interested in tax planning. MERGERS & ACQUISITIONS Rules on asset disposals tightened – China released new regulations for the sale of state assets, which all have to be approved by regulatory officials. Foreign buyers are required to bid publicly through equity exchanges. PETROCHEMICALS Exxon plant gets green light – The National Development and Reform Commission has approved the construction of a USD485 million petrochemical plant, part of a USD3.5 billion joint venture complex of Exxon (25%), Saudi Arabian Oil (25%) and Sinopec (50%) in Fujian province. The plant will have a capacity of 700,000 metric tons of p-xylene and aromatics.
The oil and petrochemicals industry recorded a 17.9% rise in profit last year. Profit increased CNY65.8 billion to CNY434.5 billion. China National Petroleum Corp, the parent of listed PetroChina, recorded a pre- tax profit growth of 4.9% to CNY185.6 billion in 2006 as turnover jumped 16.2% to CNY806.1 billion. CNOOC is predicting flat output this year of 162 million to 170 million barrels of oil equivalent (BOE). Its parent posted a 24% rise in profit last year to CNY48.1 billion.
Han Yongwen, Secretary General of the National Development and Reform Commission (NDRC) has announced that China's first oil reserve base has been put into operation.
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REAL ESTATE Utility tax to be levied in Shenzhen – The Shenzhen Municipal Bureau of Land Resources and Housing Management will start collecting a utility tax from developers on projects that were completed after November 1, 1994. The tax would amount to 2% of a development's construction cost. The announcement led to a fall in the share prices of property developers with projects in Shenzhen. The tax has not been implemented fully after it was first announced 13 years ago. One house policy for foreigners in Beijing – According to new rules, foreigners and residents of Hong Kong, Macao and Taiwan can buy only one residential property for their personal use after living in Beijing for one year and provided they have a valid residence permit.
Disputes over seizures of land by authorities accounted for half of the rural unrest in China last year. Overall, social unrest has dropped by 16.5% last year. Warburg Pincus has taken a 25% stake in Shanghai ZK Real Estate Development Co. Road King Infrastructure will increase its stake in Beijing-based Sunco Property to 94.74%. Sunco founder Sun Hongbin will retain the remainder.
A signature campaign in 20 cities calls for more affordable housing prices. SCIENCE & TECHNOLOGY Science goals set for 2020 – China will conclude 16 key scientific projects by 2020 and build 10 national laboratories. Expenditures for research and development increased 22% to CNY300 billion last year, accounting for 1.4% of GDP, which is the highest level ever recorded. The projects include the development of large aircraft, computer chips, electronic components, software, machinery and new medicines, including HIV/AIDS treatments and stem cells. More emphasis will be put on agriculture, renewable energy, mineral resources, marine environment and health. Chinese scientists are quickly catching up on world levels of research in molecular biology and nanotechnology. Minister of Science and Technology Xu Guanhua said Shanghai, Beijing and Tianjin were leading the country in scientific development. STOCK MARKETS Warnings of bubble leads to drop – A remark by National People's Congress Vice Chairman Cheng Siwei that stock markets were developing into a bubble and investors were acting relatively irrationally, led to investors selling shares fearing that the government would take further tightening measures. Stock indexes recorded their biggest single day losses in more than six months on January 31. The Shanghai Composite Index for example fell 4.92% to 2,786.34 points, the biggest drop since June last year. HSBC regional equity strategist Steven Sun estimated that CNY200 billion was wiped off the market's capitalization, the South China Morning Post reports. Top stocks including Sinopec, Industrial and Commercial Bank and China Life, all shared in the losses. The market value of listed stocks fell by 7% in the past week.
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Property companies China Property and Honglong plan to launch initial public offerings (IPOs) around the Lunar New Year in Hong Kong. Ping An Insurance (Group) has won approval to issue up to 1.15 billion local- currency A shares in Shanghai in what could become China's second largest domestic IPO, raising over CNY40 billion. New bullet trains make their debut – Six high-speed trains, modeled on Japan's bullet train, made their maiden runs on February 1 on the 139 km Guangzhou-Shenzhen route. Reaching a top speed of 250km/h, the China Railways High-speed (CRH) Model 2s could cut travel time between Guangzhou and Shenzhen from 70 minutes to 55 minutes, following the next speed increase on the railways planned for April 18. Ongoing construction on the route caused major delays in the past few days. Scandinavian Airlines (SAS) has chosen Beijing as its hub for further expansion in China and will launch four direct Beijing-Stockholm flights a week starting on March 26 in addition to its six Beijing-Copenhagen flights. Shanghai-Copenhagen flights will be discontinued on April 9.
In a poll of 60,000 passengers conducted by the China Association of Civil Aviation, Air China and Hainan Airlines were chosen as the best carriers in 2006. Chengdu, Shenzhen, Shanghai Pudong, Xiamen and Dalian were the “most satisfying airports”. Passengers were the least satisfied with the way airlines handled flight delays. VIP VISITS Hu starts 8-nation tour of Africa – Chinese President Hu Jintao is visiting 8 African countries: Cameroon, Liberia, Zambia, Namibia, South Africa, Mozambique, the Seychelles and Sudan. China is offering USD3 billion in preferential loans to African countries in the next three years and will double aid and interest-free loans over the same time period. Last year, trade between China and Africa reached USD55.5 billion, up 40% on 2005 and accumulated direct Chinese investment reached USD6.6 billion. China will also write off debts owed by 33 African countries. In Cameroon, Hu approved grants and loans worth more than USD54 million, scrapped the country's bilateral debt to China and oversaw the signing of health and educational agreements. In Sudan, Hu offered CNY40 million in aid for the peaceful resolution of the Darfur question. An investment of USD800 million to develop copper mines was announced in Zambia, as well as the cancellation of debt of nearly USD8 million that was due last year. President Hu also opened China's first joint economic and trade co-operation zone in Africa. The inauguration ceremony was held in Lusaka, but the zone is located in the Copper Belt Province.
China and Portugal signed eight agreements during the visit of Portuguese Prime Minister Jose Socrates to Beijing. A working group to promote bilateral investment will be set up. China will establish Confucius Institutes and a sales center for Chinese commodities in Portugal. Bilateral trade increased 39% to USD1.7 billion last year.
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FCCC SECTORAL BI-WEEKLY NEWSLETTERS' HEADLINES AUTOMOTIVE – METALS & MINERALS - ENVIRONMENT
Chery Automobile is considering to expand its cooperation with Fiat.
The Shanghai Futures Exchange has submitted a draft contract on zinc futures for further discussion.
Chalco has raised its spot alumina prices by 50%.
American and European makers of copper products have complained about a VAT- rebate that would give Chinese competitors an unfair advantage.
China is shifting investment in the steel industry to high-end products.
Magang (Group) Holdings will spend CNY1.1 billion on the Luohe iron ore mine in Anhui province.
More than 2,000 polluting factories were closed down in Guangdong last year. IT & TELECOM
China Mobile is expected to call for bids to build mobile phone networks based on the TD-SCDMA standard in five cities, although 3G licenses have not been awarded yet.
Sales of mobile phones in China increased 40% to 120 million last year. NXP Semiconductors plans to increase the testing and packaging of microchips in Suzhou in a joint venture with Advanced Semiconductor Engineering. LOGISTICS
The State Postal Bureau and the China Post Group Corp were formally established, separating the regulator from the operational postal business. Hudong Heavy Machinery plans to raise CNY12 billion from a share placement to expand its business and become China's biggest shipbuilder.
China's shipbuilding industry has recorded a record 14.52 million dwt output in 2006.
Dubai-based DP World plans to invest in the port of Qingdao.
The Yangtze River Delta is still not worthy of the concept of megalopolis.
The Guangzhou Port Group plans a USD750 million initial public offering. COMMENT – Everyone expects to win, many will lose
After a few years in the doldrums, China's stock markets in Shanghai and Shenzhen rose to new heights last year. Discouraged investors returned to the market. The reform of non-tradable shares in state-owned enterprises is nearing its end and new IPOs were launched. Stock prices were rising, attracting many new investors. Many who cannot distinguish between a bear and a bull are rushing to invest in stocks brought to market by companies they don't know anything about. Some are mortgaging the family silver or their homes, taking out loans or borrowing against their credit cards to invest in stocks because everybody is absolutely convinced to reap a handsome profit.
Winning money with little effort is a recognized Chinese pastime, be it by playing mah-jong,
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visiting the Macao casinos or. playing the stock market. “Everybody thinks they can win. But many will end up losing,” commented Cheng Siwei, Vice Chairman of the National People's Congress. That is exactly what happened last week when stock prices suddenly tumbled, shaving of 7% of total market capitalization.
The problem is nobody knows what is going to happen next: a further slump or a new bull run? Many more companies are preparing IPOs, offering new opportunities for investors to quickly buy and quickly sell to catch their profits. Ping An Insurance is preparing to raise USD3.86 billion in what would become the second biggest IPO in China. Ping An means 'peace and quiet'. China's stock exchanges could certainly use some. They have gone from a historic low to a historic high within one year. They could go still higher or fall still deeper. But when the profit seekers get burned, problems can not be far away. A tax on short-term capital gains could return some sense to the market.
The National Museum of China on the east side of Tiananmen Square has closed for a 3-year renovation period, but will become the world's biggest museum when it reopens in 2010 with 192,000 square meters of floor space.
Chinese applications for international patents increased 57% to a record 3,826 last year.
China National Nuclear Corp has begun building a seventh nuclear reactor at its Qinshan plant that will help increase capacity by 43% by the end of 2011.
The China Charity and Donation Information Center was set up in Beijing on February 2 to enhance the transparency of charity projects and improve financial management.
The Beijing No 1 Intermediate People's Court has ruled that Guangzhou Welman retains the legal right to use the name 'Weige', which is also widely used for Pfizer's impotence drug Viagra. Unilever's factory in Hefei, Anhui province, is to expand to become the largest of the whole group. QUOTES OF THE WEEK
“China's stock markets remain just as much of a gambling den today as they were back in 2001 when Wu Jinglian, economic adviser to Premier Zhu Rongji, famously dismissed them as nothing more than “a big casino”. [.] When markets have risen so far, so fast, it does not take much to prompt investors to take profits. That is what is happening now. A growing sense that the market has lost all touch with reality and a few official words of warning were enough to trigger a rush for the exit that pushed the benchmark index down 6.53% [on January 31].”
Tom Holland, writing in the South China Morning Post, February 1, 2007.
“The decision by your government to establish a special economic zone here in Zambia is the most welcome development. Apart from creating the much-needed employment opportunities, it will produce a culture of adding value to our own materials.”
Zambian President Levy Patrick Mwanawasa in a banquet speech to Chinese President Hu Jintao,
quoted in the South China Morning Post, February 5, 2007.
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Baker & McKenzie has issued a Client Alert on China's Employment Contract Law. It can be downloaded here:. Your banner at the FCCC website or newsletter
Companies interested in posting a banner on the FCCC website or newsletter, which is published weekly, are kindly invited to contact the FCCC for further information:
If your company is interested in publishing an advertisement in our newsletter, we kindly invite you to contact us for further information. Organisation and Founding Members FCCC President: Mr. Bert De Graeve, C.E.O, NV BEKAERT SA Vice-President: Mr. Bernard Dursin, Senior Vice-President, NV BARCO SA Secretary and Treasurer: Mr. Jan Laga, Vice-President Systems, NV PICANOL SA Executive Director: Ms. Gwenn Sonck
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Members of the Board of Directors and Founding Members: Mr. Bert De Graeve, C.E.O., NV BEKAERT SA Mr. Filip Dierckx, Member of the Executive Committee & C.E.O. Merchant Banking Worldwide, NV FORTIS SA Mr. Alain De Waele, Vice-President Corporate External Relations, NV INBEV SA Mr. Bernard Dursin, Senior Vice-President, NV BARCO SA Mr. Ronald Everaert, C.E.O. & President, NV TELINDUS GROUP SA Mr. Jan Laga, Vice-President Systems, NV PICANOL SA Mr. Luc Maton, General Manager Asian Subsidiaries, NV AHLERS BRIDGE SA Mr. Marc Stordiau, Member of the Board of Directors, NV DEME SA Mr. Pierre Van de Bruaene, Senior Vice-President EMP, NV UMICORE SA Mr. Jan Vanhevel, Managing Director and Member of the Executive Committee, NV KBC BANK SA Mr. Stefaan Vanhooren, President Agfa Graphic Systems, Member of the Executive Committee, NV AGFA-GEVAERT SA Membership Rates for 2007: Contact Flanders-China Chamber of Commerce Martelaarslaan 49, B-9000 Gent Tel.: +32 (0)9 266 14 32 - Fax: +32 (0)9 266 14 47 E-mail:Website: Share Your Story To send your input for publication in a future newsletter mail to: The FCCC Weekly Newsletter is edited by Michel Lens, who is based in Beijing and can be contacted by e-mailr mobile phone +86- 13901323431. Disclaimer: the views expressed in this newsletter are not necessarily those of the FCCC or its Board of Directors.
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Applications of Vibrational Spectroscopy in Criminal Forensic Analysis Edward G. Bartick Handbook of Vibrational Spectroscopy John M. Chalmers and Peter R. Griffiths (Editors) John Wiley & Sons Ltd, Chichester, 2002 Applications of Vibrational Spectroscopy in Criminal Forensic Analysis Edward G. Bartick FBI Academy, Quantico, VA, USA This is publication number 01-06 of
7th Grade Fall Trip 2011 Dear Seventh Grade Parents, T he Grade 7 team philosophy behind the Fall Trip is to give students an opportunity to get to know each other as well as learn about our host country, Hungary, introducing an important aspect of the school’s Mission, Vision, and Values. The beginning of the school year is an ideal time to develop friendships for new and returning s