U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 134
The China Commercial Brief is a biweekly publication including summaries about 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.
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Contributing Specialists: CS Shanghai, Pingping Xie, Xiaolei Wan, Cindy Wang, Xianmin Xi, Shuyu Sun
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 Shanghai post.
1. More and More Luxury Cars Find a Home in China
2. China Projected to Become Largest Consumer of PVC by 2005
3. SARS Expedites China’s Medical Waste Incineration Plan
4. An Analysis of China’s Oil Imports and Exports in 2002
5. Comments Solicited for Implementing Rules Governing Import of Used Mechanical and Electrical Equipment
6. China to Invest RMB2 billion for the Construction of the New Chinese Center for Disease Control and Prevention
1. More and More Luxury Cars Find a Home in China
(Source: Jiefang Daily, 04/28/2003 - Translated by Shanghai Post)
The automotive market in China, though just in its beginning stages, surprises the world in two ways:
a. The rapid growth in private car ownership
b. The large consumer purchasing power for luxury cars
Last year, three of five Bentley cars that were for sale in China, each priced at USD 1.1 million, were sold. Of the 180 Audi A8 models produced for worldwide markets, each priced at over USD 200,000, 60 were sold to China. Other luxury cars such as the BMW760 or the Mercedez S600 have all been sold in the Chinese market once they became available; at Auto Show 2002 in Shanghai, Bentley displayed their most expensive model, the Mulliner 728. Four Chinese entrepreneurs from Shanghai and neighboring areas have already expressed intentions of purchasing it.
Since economic development in China lags far behind the Western countries, the rising demand for luxury cars seems unbelievable. Who are these mysterious buyers? Auto industry experts think that in recent years, China’s policies have spurred the growth of many privately owned enterprises, most of which are scattered in the Yangtze River Delta and the Pearl River Delta regions. The entrepreneurs in these areas form a large community of luxury car owners. In China, a car is not only a means of transportation but also a status symbol. Some think this is due to conceit that is entrenched in the Chinese mentality; and many entrepreneurs have a stronger desire for luxury cars than their counterparts in the West, thus making China a paradise for luxury car manufacturers and dealers. Meanwhile, China’s automotive service industry, which is derived from car ownership, is also growing at an amazing rate.
2. China Projected to Become Largest Consumer of PVC by 2005
(Source: China Construction News, 04/11/2003 - Translated by Pingping Xie)
The global consumption of polyvinyl chloride (PVC) was 25.3 million tons in 2001. The United States, China, Japan and Germany are the top four PVC consumers, taking in 5.4million, 4.23million, 1.5million and 1.47million tons (per annum) respectively, and comprising half of the world’s total PVC consumption.
In the last five years, the China’s PVC consumption has increased at a rate of 14.5% (per year). (PVC) Consumption should remain at a 9% increase each year until 2007, while China's annual PVC production rate will increase at a rate of just 2.7%. Therefore, China will need to import large amounts of PVC raw materials in the next few years.
China's need for PVC raw materials comes (primarily) from residential construction and engineering projects. Over the next five years, China plans to build PVC production lines that will produce 1.7 million tons per year, the increase accounting for two-thirds of the global increase in PVC production.
3. SARS Expedites China’s Medical Waste Incineration Plan
(Source: FCS Beijing, 05/19/2003 - Translated by Xiaolei Wan)
Due to the impact of SARS in China, the State Council will issue a notice to expedite the construction for central medical waste treatment facilities. According to the 10th Five-Year-Plan, cities with populations over 200,000 should have central medical waste treatment facilities by the end of 2005. The main purpose is to prevent and control the spread of many viruses and infectious.
The State Environmental Protection Administration (SEPA) is authorized to collect technologies and report to the State Development and Reform Commission (SDRC), formerly the State Planning and Development Commission, by June 10, 2003. SDRC will then report to State Council by July 10, 2003. After the State Council approves the budget, local governments could receive partial subsidies from central government for facilities construction. SEPA needs to collect technologies for central medical waste treatment by May 30, 2003.
The local Environmental Protection Bureaus (EPBs) will be responsible for the projects and local health bureaus will be in charge of waste categorization and packaging in different hospitals.
The required central medical waste treatment technologies are focused primarily on different incinerators, including plasma, rotary, pyrolysis, high-temperature steam, and microwave technologies.
To any company interested in this project, please send your technology standard, quotation, operation cost and contact information to:
Mr. Wu Shunze, PHD Director
China Academy for Environmental Planning
China Research Academy of Environmental Sciences
Tel: (86-10) 8491-5266
Fax: (86-10) 8491-5995
Email: wusz@svrl-pek.unep.net
Contacts at the U.S. Commercial Service, U.S. Embassy in Beijing:
Kellie Holloway, Commercial Officer
U.S. Commercial Service U.S. Embassy Beijing
31/F North Tower, Kerry Center,
1 Guanghua Road, 100020
Tel: (86-10) 8529-6655 x 819
Fax: (86-10) 8529-6558
Email: Kellie.Holloway@mail.doc.gov
http://www.buyusa.gov/china/en
Xiaolei Wan, TDA Project Coordinator
U.S. Commercial Service, U.S. Embassy Beijing
31/F North Tower, Kerry Center,
1 Guanghua Road, 100020
Tel: (86-10) 8529-6655 x 839
Fax: (86-10) 8529-6558
Email: xiaolei.wan@mail.doc.gov
http://www.buyusa.gov/china/en
4. An Analysis of China’s Oil Imports and Exports in 2002
(Source: International Petroleum Vol 3, 2003 - Translated by Cindy Wang)
With the stable development of China’s economy in 2002, domestic needs have increased for oil products. With an increase in crude oil processing in Chinese refineries, 2002 crude oil exports increased by 15%, and reached 69,407,700 tons. Export to Japan, however, decreased dramatically. Annual crude oil export to Japan decreased by 7,208,100 tons, 4.5% down from last year. Despite decreased exports to Japan, China's crude oil net import reached 62,2000,000 tons; China’s net oil import set a record high in 2002 by reaching 71.8 million tons, up 10.7 percent from the previous year. The proportion of net imported crude volume to the crude processing volume exceeded 31 percent for the first time. The import of sulfur crude oil rose 2.8 percent to 24.1 million tons, accounting for about 35 percent of the total crude import. Sudan sway the highest volume of crude oil exported to China among the African countries. The equity oil form Sudan reached 6.42 million tons, up 29.2 percent. Meanwhile, the import of oil products was 20.352 million tons, 5.1 percent down as compared to the previous year.
Non-state trade of oil products did not exert substantial influence on the domestic market. The export of oil products set a record high by reaching 10.7 million tons, a 15.6 percent increase over the previous year. The export of gasoline topped 6 million tons. It is estimated that China’s net oil import will maintain a rising momentum in 2003. The quotas for import of oil products are 25.3 million tons, of which the non-state trade volume is 3.5 million tons. Fuel oil accounts for most part of the quota. The competition among the oil-importing enterprises will be intensified in 2003 because Chinese government has recently approved 16 companies to conduct the non-state trade. However, the slight increase of diesel import is not enough to influence the country’s domestic market supply-demand structure. China’s oil import is still on the increase. Half of the oil import is from the unstable Middle East, but the country is short of the measures to cope with disruption of oil supplies. Therefore, the risk is growing for the oil supplies.
5. Comments Solicited for Implementing Rules Governing Import of Used Mechanical and
Electrical Equipment
(Source: Amcham, USITO, AQSIQ and Commercial Service, 05/22/2003 - Translated by Xianmin Xi)
In compliance with World Trade Organization (WTO) requirements, China is now soliciting comments on the draft Implementing Rules for Supervision and Administration of Imported Used Mechanical and Electrical Equipment released on April 24, 2003. Rules for Supervision and Administration of Imported Used Mechanical and Electrical Equipment was published on December 31, 2002.
The two regulations were to go into effect on May 1, 2003. According to American Chamber of Commerce (Amcham), China notified the WTO on April 25 that it will delay implementation of the two Rules until August 1, 2003. Companies can submit comments on the draft Implementing Rules before June 28, 2003 to China's national Technical Barriers to Trade (TBT) inquiry point:
WTO TBT Inquiry Point
7 Madian Donglu, Haidian District, Beijing, China 100088
Tel: 86-10-8226-0618
Fax: 86-10-8226-2448
E-mail: tbt@aqsiq.gov.cn
Internet: http://www.wto-tbt.gov.cn
Chinese verion of the Rules can be found at the following web addresses. English versions are being translated by Commercial Service and will be made available upon request.
http://www.aqsiq.gov.cn/cgi-bin/detail.cgi?classid=00000000000000010173
http://www.aqsiq.gov.cn/cgi-bin/detail.cgi?classid=00000000000000010993
http://www.aqsiq.gov.cn/cgi-bin/detail.cgi?classid=00000000000000011026
6. China to Invest RMB 2 Billion for the Construction of the New Chinese Center for
Disease Control and Prevention
(Source: Beijing Star Daily, 5/21/03 - Translated by Shuyu Sun)
According to Chinese officials attending the 56th World Health Organization (WHO) conference in Geneva, the Chinese government is planning to begin construction of a large scale Center for Disease Control and Prevention.
The new Center for Disease Control and Prevention will be based on the existing one, but will be an expanded and strengthened facility, more magnificent in scale and more advanced in technology. The Chinese government is planning to invest RMB 2 billion (USD 242 million) and construction will be complete before 2008.
China’s Vice Premier and current Minister of Health, Madam Wu Yi, introduced this plan to the U.S. Secretary of the Department of Health during their meeting. The Secretary expressed that the United States would provide technical assistance to China in building the new center.
Embassy News
TDA Strikes Again!:The U.S. Commercial Service hosted two U.S. Trade Development Agency (USTDA) signing ceremonies during the week of May 12. On May 13 in Shanghai, CO Mayfield organized a signing ceremony between USTDA and the Shanghai Environmental Protection Bureau (SEPB) for a $204,000 Grant Agreement to conduct a Feasibility Study for Shanghai’s Centralized Hospital Waste Disposal System. Although this project has been in the pipeline for several months, China’s fight against SARS has cast a spotlight on the need for improved hospital waste collection and treatment management, and should create opportunities for U.S. technology providers in the future.
On May 14 in Beijing, another Grant Agreement was signed between USTDA and the Ningxia Petrochemical Industry Group Co., Ltd. (NPCI). The signing capped more than a year's worth of diligent discussion and hard work between TDA, the U.S. Commercial Service and NPCI, who is preparing to establish a Sino-Foreign joint venture to construct a 830,000 tons/year coal-derived Dimethyl Ether plant in Ningxia Province. USTDA will award the $675,000 grant to partially fund the cost of a feasibility study, which will further define the scale, technologies, management and capital requirement for the $570 million project's overall design, construction and operation. Visit our website news for the full story: http://www.buyusa.gov/china/en/tda_signing.html
DVC with Minnesota Companies: CS Beijing brought the latest China market information and business opportunities to a group of 20 Minnesota exporters during a three-city videoconference briefing on May 14. Commercial Officers Cameron Werker and Kellie Holloway delivered the briefing from Beijing and Washington, D.C., respectively, during the 2-hour event co-organized with the Minnesota trade office. Topics included WTO, IPR, IT and Environmental sector issues, and the Beijing Olympic Games.
CS China Bids Farewell: to Commercial Specialist Yu Hongmei, who has been a dedicated employee of the Commercial Service in Shenyang for four years. CS Yu was awarded the China Mission Foreign Service National of the Year Award in 2002. We are sad to see her go and wish her all the best in her future endeavors. AND… CS China Welcomes: Commercial Assistant Lisa Tang, who comes from Proctor & Gamble, where she was a Key Account Manager. In her new position with CS Shanghai, Lisa covers the Semiconductor, Advanced Materials and Financial Services sectors.
Videoconferencing: Solution to Postponed China Travel - We are actively encouraging companies that are hesitant or have cancelled business trips to use video teleconference as a means of meeting with Chinese clients. This can be done with their own equipment or through any of our 100+ domestic offices. More information is available at: http://www.buyusa.gov/china/en/aimr.html.
Consulate News: Shanghai
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 Shanghai:
The anticipated heavy calendar of commercial events and visitors this spring at FCS turned quickly into a less predictable period in March, under the twin influences of the war in Iraq and the general alarm about the spread of SARS in China. With a new threat alert and the temporary closing of off-site Consulate offices at the outset of Mideast hostilities, followed by the city government's stepped up efforts to contain confirmed and suspected cases of SARS, FCS's visitor load dropped off very fast, and other work took over. Dozens of events, missions, high-level visits, Gold Keys, conferences and seminars were postponed or cancelled, and staff got busy dealing with pressing reporting, staffing, office space, budget, systems, and incentives issues. Restorative work began on the commercial library and the Chinese language database program, and high performers who had brought Shanghai's success story quota close to the target for the year at just the half year mark were recognized with awards.
It was a good time to confer with economic colleagues on a host of shared topics. Ongoing projects including financial institution reform, deregulation, logistics modernization, IPR protection, and dispute resolution received a boost as staff took advantage of freed up schedules to get the latest from Chinese sources. Shanghai Commercial Rep Paul Swenson and Econ Rep Kris Kvols also helped half a dozen Shanghai city bureaus to source the temperature measuring and other equipment they sought as the city ramped up for tighter SARS-related surveillance of travellers' health at city entry points. Meanwhile FCS is helping U.S. companies continue operating by offering them video conferencing in lieu of travel (see CS China's website), and by getting them information on altered deadlines. For example, the CCC Mark certification requirement is now postponed beyond May 1 with no new deadline. A new "BSP" service gives U.S. firms in China the opportunity to advertise their services on the CS China website (see the website). Other activity currently on hold, including a TDA reverse mission on emergency services in the U.S., will be resurrected when the SARS scare is over. The early summer may continue quiet, but fall could turn very lively
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.
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INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2002. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.