Subscribe to Advertising & Marketing Review!
Contact Ken Custer at 303-277-9840.
China Commercial BriefU.S Commercial Service -- American Embassy, Beijing
Vol. 2 No. 123
11.22.2002
(Editor's Note: The U.S. Embassy in Beijing, China publishes a free bi-weekly e-mail newsletter on marketing opportunities and business conditions in China.
This is the latest edition as of press time. Subscription information is included, and we hope you'll take advantage of it. If you're ever planning on doing business with China, and many of us should be, this is a must read.)
The China Commercial Brief is a biweekly publication featuring summaries of
developments in China's various commercial sectors, tips on doing business
in China, and U.S. Embassy news. This publication is free of charge: please
forward it to your colleagues and friends who are interested in China.
If you have been forwarded this newsletter by a friend, you may subscribe
by sending a blank email to join-china-commercial-brief@list.xianzai.com.
Editor: David Snodgrass
Contributors: CS Guangzhou, Grace Cao, Cindy Wang, Shen Yan, Qiu Jing, Wang
Yi
News Briefs
In addition to the article summaries provided by CS Beijing, our four China
branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit
summaries of commercial articles from their local press to the CCB on a
rotating schedule. This week we are pleased to feature a contribution from
our Guangzhou post.
1. Guangzhou City's New Rail Connection Network Plan for 2010
2. 2003 Fertilizer Tariff Rate Quota Released
3. A Strategy to Accelerate China's Oil and Gas Pipeline Development
4. China To Establish A Hundred Logistics Centers In the Next Decade
5. Regulation Allowing Foreign Investment in Publishing Industry To Be
Issued
6. China Certification Center for Energy Conservation Products
7. Rules for Foreign Investment in State-Owned Companies Published
1. Guangzhou City's New Rail Connection Network Plan for 2010
Guangzhou City's municipal government recently announced its plan to build
a 500 km-long rail connection network by 2010. The ambitious plan consists
of 14 to 15 metro lines and a 67 km-long suburban train line. There will be
13 major destinations in urban areas, 21 crossing stations, and 58
passenger stations.
Total investment in the project is estimated at RMB 200 billion (US $2.42
billion), of which 60 percent will come from funds from the government and
land sales, and 40 percent from bank loans. If all lines are built as metro
lines, the cost will total RMB 400 million (US $48.4 million) per kilometer
for engineering, construction and system equipment. The cost may be lower
if some lines are built as ground rail lines.
The plan sets Guangzhou's main area as the network center, with Guangzhou
New City and the Nansha Zone south of the main city targeted as future
development focus areas. Future rail connection needs with neighboring
cities in the Pearl River Delta area have been included in the plan. It is
believed that the new rail network will enhance Guangzhou's role as the
region's central city. Upon completion of the huge project, it will take 30
minutes at most to cross the main urban area, and only one hour to travel
to neighboring cities.
Two parts of the plan were published November 7 to solicit public opinion
for a period of 15 days. The plan will subsequently be reviewed by domestic
experts and will eventually be submitted for final approval.
(Sources: New Express, Guangzhou Daily, 11/07/2002 - Translated by CS
Guangzhou)
2. 2003 Fertilizer Tariff Rate Quota Released
On October 14, 2002, China's State Economic and Trade Commission (SETC)
publicly released the import volume, allocation principles, and application
procedure for the 2003 fertilizer Tariff Rate Quota (TRQ).
For urea (3102.1000), diammonium phosphate (DAP) (3105.2000) and compound
fertilizer (NPK) (3105.3000), a 4% tariff is levied on imports within the
TRQ, while a 50% tariff is levied on imports over the TRQ. The following
are details of the Tariff Rate Quota:
- The total TRQ for fertilizer in 2003 is 1.8 million tons of urea, 5.95
million tons of DAP, and 2.98 million tons of NPK.
- The allocation for the State sector is 1.62 million tons of urea, 4.76
million tons of DAP, and 2.38 million tons of NPK.
- The allocation for non-State sectors is 180,000 tons of urea, 1.19
million tons of DAP, 600,000 tons of NPK.
All qualified fertilizer importers were to have submitted their
applications to the SETC or to TRQ management agencies authorized by the
SETC by Oct. 31, 2002. The final allocation will be published at a later
date.
(Source: Agrochemical Week, 10/18/2002 - Translated by Grace Cao)
3. A Strategy to Accelerate China's Oil and Gas Pipeline Development
PetroChina Pipeline Company: With oil and gas imports rising and the
development of natural gas resources expanding, China's pipeline
transmission sector is becoming increasingly efficient, affordable, and
secure. The oil and gas transmission sector in China will experience rapid
development within the next one to two decades, making the country's
pipeline industry among the world's most developed. According to some
officials, a deep-water unloading dock and related facilities including an
oil depot and oil transmission station in the East and South China Sea will
be needed as China currently lacks such facilities. Sinopec plans to build
an unloading dock and an island oil depot in the Zhoushan Area of Zhejiang
Province with a total capacity of 0.3 million tons. New crude oil pipelines
are likely to include one running from Daye Island via the Nanjing Refinery
to Yangtze Petrochemical Plant, and another from Cezi Island to Shanghai
Jinshan Refinery and Gaoqiao Refinery. For the time being, the transmission
of China's domestically-produced refined oil relies on road and railway
transportation systems. Thus, not only are transportation fees high, but
transportation safety cannot be sufficiently guaranteed due to the
volatility of the light composition of refined oil which can cause air
pollution and influence the oil's quality. Given this situation, the
development of oil and gas pipelines in China is critical. PetroChina just
announced that RMB 200 billion will be invested to build China's oil and
gas transmission pipeline network within the next ten years. The pipeline
sector in China has witnessed a trend toward multi-level investment with
changes in the management of pipeline operating enterprises. Therefore,
companies operating oil and gas transmission pipelines will have to face
international competition as well as regional competition. In fact, there
is a large gap between China's oil and gas transmission pipeline companies
and the world's leading transmission pipeline companies in terms of overall
technology and management. For example, fewer domestic companies have adopted the
SCADA system to automatically adjust and manipulate the pipeline network
system, and domestic companies have just begun to use ERP as an enterprise
information management system, a system already popular with their overseas
counterparts. Moreover, foreign oil pipelines utilize only one staff person
per ten kilometers for operation management, while reshuffling of Chinese
pipeline enterprises has resulted in a standard of one person per kilometer
along Chinese oil pipelines. Chinese enterprises are expected to raise
management levels, increase investment in science and technology, promote
technological progress, actively develop diversified downstream markets,
and continue strategic restructuring. These measures aim to bring the
country's oil and gas pipeline and storage business under unified planning,
unified construction and operation, and unified management in order to
increase the competitiveness of China's industry.
(Source: International Petroleum Economics, 10/2002 - Translated by Cindy
Wang)
4. China To Establish A Hundred Logistics Centers In the Next Decade.
Sources from the China International Logistics & Transportation Exposition
indicate that China will devote more resources to its logistics industry.
In the next ten years, a hundred logistics centers will be built nationwide
with a handling and management center located in Beijing to centralize all
relevant requests.
As China's national economy develops rapidly in a more globalized world
economy, the logistics industry is becoming increasingly important. China's
State Council has put the logistics industry on the priority list for its
Tenth Five-Year Plan. According to China's State Economic and Trade
Commission, currently China's entire sales volume for the logistics
industry totals RMB two hundred billion. However, this figure accounts only
for 5% of the country's GDP. It is estimated that third party logistics
(TPL) will increase dramatically in the coming years, rising from RMB four
billion to RMB ten billion in the near future.
(Source: Beijing Business Today, 11/12/2002 - Translated by Shen Yan)
5. Regulation Allowing Foreign Investment in Publishing Industry To Be
Issued
Mr. Liu Bingjie, Deputy Director of China's General Administration of Press
and Publication, talked to China's Business Post about the publishing
industry and the possibility of allowing foreign investment into China's
publishing distribution market.
China's WTO commitment in this industry includes opening up the publishing
trade and distribution service sector, in addition to further enforcing
copyright protection.
With regard to the opening up of publishing distribution services, China
has already opened the distribution market in some cities as a pilot and
will open the retail and wholesale markets in all cities within three years
of China's WTO accession. Currently, China only allows foreign entities to
hold a minority shareholder position.
China is working to fulfill its promise by:
1. Drafting relevant policy.
A temporary regulation allowing foreign investment into the distribution
market will be issued by the end of this year.
2. Testing.
China has already allowed all types of domestic capital in the distribution
market and now has 57,000 privately- owned book and audio-video products
stores. This number is four times greater than the number of state-owned
stores. China is currently conducting tests to allow foreign capital into
this market. China will first allow capital from Hong Kong, Macau and
Taiwan to enter the market. All policies for foreign capital will first
open to investment from these three locations.
3. Preparing to open to foreign investment.
In the five years after China joins the WTO, the main channel will still be
for state-owned companies to serve as the majority shareholder.
China now publishes 2,100 newspapers and 8,889 periodicals. China also
boasts 200 publishing agencies for books and audio-video products.
(Source: Business Post, 11/15/2002 - Translated by Qiu Jing)
6. China Certification Center for Energy Conservation Products
The China Certification Center for Energy Conservation Products recently
initiated certification for water-saving products. The first phase of
certification will include water faucets, toilets and shower nozzles.
Certification for washing machines, irrigation equipment and cooling towers
will begin soon.
It is estimated that if these water-saving products can be utilized, the
country could potentially save 490 million cubic meters of water per month.
"The launch of certification for water-saving products is of pragmatic
significance to China," as there are about 600 Chinese cities facing water
shortages, said Mr. Xie Ji, Director of the Water Conservation Division
under the Comprehensive Utilization of Resources Department of the State
Economic and Trade Commission (SETC). While putting great effort into
solving water conservation problems in industries, SETC is also actively
trying to promote water-saving equipment, products and technologies.
(Source: China Environmental News, 10/31/2002 - Translated by Wang Yi)
7. Rules for Foreign Investment in State-Owned Companies Published
China published rules on November 12 allowing foreigners to invest in
unlisted state-owned companies in yet another key move to open the
country's largely closed corporate world to overseas investors. The rules
for unlisted firms, which will take effect on January 1 and explicitly
exclude the finance sector, are the latest in a series of reforms announced
this month to boost foreign investment. "The rules were made to guide and
standardize the activities of foreign investment in reforming state-owned
enterprises, and to promote restructuring of the state economy," said the
rules, published on www.setc.gov.cn, the web site of the State Economic and
Trade Commission (SETC). Companies selling stakes to foreigners must win
approval from departments in charge of economy and trade at the same level
of government, said the rules jointly issued by the SETC, finance ministry,
foreign exchange and industrial and commercial bureaux. For instance, firms
at the national level and their subsidiaries must be approved by cen
tral government, they said. If the new firm has total assets of more than
$30 million the central government must approve it, the rules said. China
issued new rules in early November lifting a ban on foreigners buying
non-tradable shares in listed companies.
(Reprinted from Reuters: Shanghai, 11/12/2002)
Consulate News: Guangzhou
In keeping with our goal of making the CCB a more integrated publication,
our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang -
submit consulate news to the CCB on a rotating schedule. This week, we are
pleased to feature a contribution from CS Guangzhou:
The 4th China International Aviation & Aerospace Exhibition (Airshow China)
was held in Zhuhai, November 4-7, 2002. CS Guangzhou, in association with
ITA's Aerospace and Defense Technology team, organized the Aerospace
Executive Service (AES) trade mission for Airshow China 2002. Six U.S.
companies participated in Airshow China 2002 through the AES program,
including Sargent Controls, Industrial Metals International, Apex Design
Technology, Welcom, Tech Systems International (representing KGS
Electronics), and Compass Aerospace. The number of the AES participants
doubled from three at the last airshow two years ago. CS Guangzhou arranged
a total of 65 one-on-one meetings for the AES companies during the airshow.
AES companies commended CS services for the airshow. In a message to the
Commerce Department, Marcel Zondag of Sargent Controls wrote:
"The mission served our purpose of market reconnaissance and intelligence
gathering very well and we consider the program a definite 'value for
money.' ?A further word of thanks is in place for the Commercial Service
staff from Guangzhou, who worked tirelessly to make the program a success
and improvised well around the many problems associated with conducting a
trade mission of this kind. This was a positive experience for us and we
look forward to participate in similar events in the future."
CS Guangzhou also organized a CG breakfast briefing for U.S. participants.
The briefing attracted nearly 30 people from major U.S. companies such as
Boeing, GE-Pratt & Whitney Engine Alliance, Raytheon Aircraft, United
Technologies, Gulfstream, Rockwell Collins, etc. In addition, CS Guangzhou,
as part of the CS advocacy efforts, accompanied the Consul General to the
signing ceremonies of two important commercial agreements of GE Aircraft
Engines and Boeing. After fierce competition, GE Aircraft Engines finally
signed an agreement with China Aviation Industry Corporation I (AVIC I) to
provide aircraft engines for ARJ21, China's ambitious regional jet program.
The deal may lead to contracts worth as much as $2.5 billion. Boeing also
signed an agreement with AVIC I to provide consulting services to ARJ21.
Ping Ping's Picks
Finding out what you need to know is often difficult to do in China. To
make the process easier, we feature a different source of commercial
information in this section every week.
Fairs & Exhibitions China 2003 was compiled by the China Council for the
Promotion of International Trade (CCPIT). It contains information on nearly
700 fairs and exhibitions in 43 cities in China. It is an English - Chinese
bilingual publication that can be used to look up an exhibition by city or
by relevant industry. Even if the fairs and exhibitions are in the same
city, one can search for them according to chronological order.
If you need more information about this guide, please call: 6801 3344
ext.8706 or 8401, or visit CCPIT's web page: www.ccpit.org
-----------------------------------------------------------------
Jenny (Pingping) Xie is the Information Guru for CS Beijing.
DISCLAIMER: CS China does not guarantee the veracity of the original
sources of our news summaries. While we do our best to report accurate and
timely articles and news sources, you should always check the source for
further information.
The China Commercial Brief is a free newsletter published by the U.S.
Embassy- Beijing.
If you have been forwarded this newsletter by a friend, you may subscribe
by sending a blank email to join-china-commercial-brief@list.xianzai.com.
If you have any questions or comments about this publication, please send
an email to David.Snodgrass@mail.doc.gov.
****************************************************
INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF
STATE, 2002.
ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.
Thank you to Xianzai.com for the use of its secure servers and mailing list software. Get China info at http://www.xianzai.com
---
You are currently subscribed to the China Commercial Brief as: review@ad-mkt-review.com.
To unsubscribe send a blank email to leave-china-commercial-brief-1830193A@list.xianzai.com
For more advertising and marketing help, news, resources and information visit our Home Page.
