U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 142
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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Editor: Matthew Gettman
Contributors: CS Shenyang,Shen yan, Michael Mei, Sun shuyu, Bai Ying, Michael Wang
News Briefs
In addition to the article summaries CS Beijing provides , 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. Shanghai will Invest USD 1.45 Billion in Power Construction
2.China’s Broadband Market
3.China's First Enterprise Resource Planning Standard Technical Standard Goes Into Effect on Oct. 1, 2003
4.China Warns of Excessive Investment in Cement and Encourages Environment-Friendly Cement Production
5.The Olympic Venue Coating Bidding is Coming Soon
6.Beijing’s USD 7.2 Billion Infrastructure Projects
1. Shanghai will Invest USD 1.45 Billion in Power Construction
"Shanghai will invest USD 1.45 Billion over the next two years in the construction of electric power generation infrastructure", said a Chinese Government official at the 2003 China Power Forum held in Shanghai on September 8.
The unusual heat wave in Shanghai and its neighboring provinces during this past summer revealed a serious power shortage in China's wealthiest region. Many cities had to intervene with controls on power usage in residential and industrial areas during peak periods, which seriously impacted people’s daily lives and normal operations for industry. Mr. Zhao Xizheng, General Manager of National Power Network Corporation, stated that although Shanghai has recently focused on building alternative electric power generating devices like wind power generators and solar power generators, the city must also give equal importance to standard electric power needs such as expanding the power grid and improving transmission and distribution systems.
According to Mr. Zhao, China’s total installed electricity generating capacity was 356 GW at the end of 2002, and the total output capacity was 165.42 trillion KW, putting China second in the world in capacity. However, per capita capacity is not even half of the global per capita average, and only 1/6 of that in industrial countries.
(Source: Official Website of Shanghai Government, 09/09/2003 - Translated by FCS Shanghai)
2. China’s Broadband Market
Investment in China’s broadband market is expected to reach USD 543 Million in 2003. As a result, China’s fixed network companies plan to expand their networks to cope with the increase. China’s forecasts broadband users will reach 21 million by 2005, twice the number of active users anticipated by the end of this year. China’s biggest fixed network telecom carriers, China Telecom and China Netcom, will dominate the market in the coming years. They are predicted to upgrade their current network by DSL technology. Currently, China Telecom occupies 66% of the market, China Netcom occupies 20% and Great Wall Broadband occupies 6%.
(Source: China Business Post, 09/08/2003 - Translated by Qiu Jing)
3.China's 1st Enterprise Resource Planning Standard Technical Standard Goes Into Effect on Oct. 1, 2003
The Enterprise Resource Planning Standard (ERPS), mainland China's first ERP technical standard issued by CAPPC (China Association of Productivity Promotion Centers), has been approved by Ministry of Information Industry (MII) as one of the national standards for China's electronics industry. The regulation will be put in effect on October 1, 2003.
On June 4, MII issued the first chapter of the Enterprise Informatization Technology Standard (EITS), and decided to put into effect on Oct 1, 2003. Following the launch of ERPS, other chapters of the EITS will also be released in the future. The drafting of all the above technical standards are supported by MII and Ministry of Science and Technology (MOST).
The ERPS is composed of three parts, requirements for ERP's product development technologies, requirements for ERP's product service technologies and requirements for ERP's product function technologies. The standard was recommended to be used by domestic enterprises in choosing their ERP solutions and ERP services in future.
In order to promote the appliance of ERPS in mainland China, CAPPC will carry out a series of promotion activities in scores of domestic cities in future. Hangzhou will have this promotional activity from October 30 to December 2, 2003.
The ERPS has taken CAPPC two years to develop after investigating more than 2,000 companies. The standard is presently undergoing trials in more than 100 IT companies. More than 20 of China's ERP solutions providers participated in the drafting of the standard, including UFsoft, Digital China, Harbin Institute of Technology Crown Co., New Brand Software, Riamb Software and Fujitsu.
(Sources: China Information World, 09/01/2003 - Translated by Merry Cao)
4. China Warns of Excessive Investment in Cement and Encourages Environment-Friendly Cement Production
Since the cement industry may soon face excessive production capacity, the Chinese government is warning potential investors in the cement industry to be aware this situation. Investors should make a careful analysis before investing in cement, due to currently supply and demand are basically balanced, prices are stable and but over-supply is a rising potential.
China produced 370 tons of cement, a 15% rise over last year with a sales-output ratio of over 95%. Figures indicate that profits this year were better than last year. However, problems also appeared during this rapid development, including too many small plants who dismiss long-term development plans and environmental protection, especially in China's western region.
Ma Kai, Minister of the State Development and Reform Commission (SDRC) said the Chinese Government will encourage a reshuffle of the cement industry through merger, takeover and re-grouping of the existing cement producers. Meanwhile, all new cement plants must meet a production capacity of at least 2,000 tons per day. In addition, the Government will encourage large-scale enterprise groups in the eastern part of the country to take over technically backward cement plants in western areas, in a bid to alleviate mounting environmental pressure in these western areas.
(Source: China Economic Information, 08/14/2003 - Translated by Pingping Xie)
5. The Olympic Venue Coating Bidding is Coming Soon
The overall budget for Olympic Venue projects is estimated to reach USD 32.37 Billion and 10 percent, or USD 3.24 Billion, is estimated to be used for the coating materials on the Olympic venues.
According to the schedule of BOCOG, all ownership decisions will be made by the end of October 2003 for the Olympic venue projects. Subsequently, the project owners will select the construction, construction supervision and building material supplier. While the venue's coatings are applied mainly during the last construction phase, the coating supplier are anticipated to be selected by the end of 2003 per BOCOG's guidance. The guidance further suggests that the coatings' suppliers have significant available capital, sound finances and willingness to bear risks.
(Source: Yuegang Information News, 09/08/2003 - Translated by Sherry Cai)
6. Beijing’s USD 7.2 Billion Infrastructure Projects
The Beijing Municipal Government yesterday presented 50 infrastructure projects to Chinese and foreign enterprises worth of USD 7.2 Billion at yesterday's (September 10, 2003) promotional fair. The Government officials announced that the projects focus on sewage treatment, expressways, metro line construction and water supplies.
The Beijing Municipal Government also issued a new regulation -- The Regulation on Chartered Operations of Beijing Urban Infrastructure Facilities to further encourage private and foreign investment in Beijing's infrastructure. According to the new regulation, private and foreign funding will be allowed to conduct chartered operations in infrastructure facilities, including water, gas and heating supplies, sewage treatment and solid waste disposal, public transport, such as expressways, subway lines, light rail system and bus routes. The possible forms of investment are build-operate-transfer (BOT), transfer-operate-transfer (TOT) and chartered operations of public services.
(Source: Beijing Business Today, 09/11/2003 - Translated by Xu Ye)
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.
Shanghai had a busy July and August even as some expat business people took a break and Chinese officials made overseas trips delayed from the spring. FCS welcomed the U.S. Customs and Border Protection Commissioner for meetings on the Container Security Initiative. U.S. companies were in town to negotiate and celebrate skyscraper, avionics, solid waste, boutique coffee, and smart buildings projects. FCS organized an innovative hospital waste seminar. A senior Eximbank team visited Shanghai to sleuth out niche financing opportunities for U.S. exporters in the cash-rich Chinese banking environment. They are looking for good projects in energy, the environment, transportation, and medical equipment. Amcham prepared for its annual Washington DC Door Knock. The World Expo 2010 Office opened for business. And then September was suddenly upon us, with a blitz of trade missions in architecture, engineering and construction, Singapore-based U.S. business, franchising and retail, and Alabama industries, along with a dozen separate company Gold Key and IPS "repfinds". TDA's Asia Director also spent a busy day talking to East Chinese decision-makers on water, wastewater, solid waste, soil remediation, and corporate bond financing projects. This fall Shanghai is making up for lost days during wars and SARS with jam-packed calendars and a revolving door of visitors.
For more information on CS Shanghai consular region, visit our website at http://www.buyusa.gov/china/en/Shanghai.html
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, 2003. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.