U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 148
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, Wang Yi, Wang Ling, Peng Aiqun, Shen Yan, Qiu Jing
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 Guangzhou post.
1. "Rejuvenate the Northeast", Views From Jilin Province
2. China Introduces Enhanced DVD to Evade Huge Licensing Fee
3. China To Continue Tariff Rate Cuts in 2004
4. Beijing to invest RMB 3.2 billion (USD 400 million) to build Garbage Treatment Facilities
5.China Will Further Open Foreign Investment Areas
6.Overview of China’s Petrochemical Industry
1. "Rejuvenate the Northeast", Views From Jilin Province
On August 4, Premier Wen Jiabao convened a meeting in Changchun, the capital of Jilin Province, to unveil the "Rejuvenate the Northeast" campaign. Months following the initiation of this campaign, it appears that Jilin’s preparations are lagging behind China's other Northeastern provinces of Liaoning and Heilongjiang. These provinces have developed detailed plans, while proposals from cities within Jilin are in the preliminary drafting stage, and will be reviewed by the Jilin People’s Congress after February 8, 2004. In November 2003, the Changchun Municipal Government revealed the broad objectives of a three-phase proposal during a meeting with CS Shenyang.
Phase I, slated to be completed by the end of 2006, is called preliminary results (chujian chengxiao). It comprises a conclusion period for ongoing SOE programs and a reiteration of current economic development priorities.Changchun expects the Chinese Central Government to provide funding for the following Phase I priorities: completion of state-owned enterprise reform, the creation of a social safety net, and construction of major infrastructure projects. Real implementation of Jilin’s economic rejuvenation plan will begin in 2007 and be completed during 2011.
Of interest to the American business community, Changchun Development and Planning officials noted that Changchun’s proposal for economic rejuvenation will be anchored in its two leading industries, transportation equipment and agricultural chemicals. (Seventy-eight percent of Jilin’s GDP is attributable to production of autos, auto parts, rail cars, and trucks). The Changchun
officials anticipate that technical capabilities will be upgraded for manufacture of electric power generation equipment, instruments, microelectronics, new materials, and organic agricultural products. Foreign investment projects publicized in 2003 may be folded into the rejuvenation plan. If Jilin Province receives capital from the Chinese Central Government for the rejuvenation program in 2004, direct export opportunities may arise from projects previously reserved for foreign investment.
(Source: Interview with Changchun Development and Planning Commission, 12/22/03-Translated by FCS Shenyang)
2. China Introduces Enhanced DVD to Evade Huge Licensing Fee
China will promote an upgraded consumer electronic product, in place of the DVD (or Digital Video Disk), during this upcoming golden sales season, according to China Digital Disk Technologies Community.
A spokesman for the Community said it hoped the new audio and video device, EVD (or Enhanced Versatile Disk), would successfully eat into DVD current market share.
Funded by the Chinese Central Government, major Chinese manufacturers initiated research to develop EVD in 1999. Beijing E-world Technology Co., Ltd., part of the Community, said that it has already implemented primary development, chip designing and industrialization for this new technology. The Community applied for 25 EVD techonology related patents and received seven patents so far. Approximately 40 additional patent applications are also in the pipeline.
In addition, the Community submitted an application for EVD technical standards to the International Electrotechnical Commission and the International Organization for Standardization.
Wang Jingchuan, Commissioner of China's State Intellectual Property Office (SIPO), said that by developing and promoting EVD, Chinese companies gained much experience in competing with their global counterparts in the high-tech industry.
(Source: CEI news, 11/2003 - Translated by Qiu Jing)
3. China To Continue Tariff Rate Cuts in 2004
China will continue to cut its tariff rates according to its commitment to the World Trade Organization, said a senior customs official yesterday.
Although the specific figures for tariff rate cuts have not been set for next year, we can be assured that the rates will be on a downward track. Liu Wenjie, deputy director of the General Administration of Customs made the remarks at a press conference in Beijing on the newly released Regulation on Import and Export Duties.
Customs revenue reached RMB 338 billion (USD 40.8 billion) through the January-November period, RMB 103.8 billion (USD 12.55 billion) more than that collected during the same period last year.
Experts note that the new Import and Export Duties Regulation, which will replace the current regulation that was implemented in 1985, have added clear and specific provisions about the definition of customs value and relevant tariff rates, which conform to WTO rules.
(Source: Beijing Youth Daily, 12/10/03 - Translated by Shen Yan)
4. Beijing to Invest RMB 3.2 billion (USD 400 million) to build Garbage Treatment Facilities
The year 2008, Beijing will invest RMB 3.2 billion (USD 400 million) to build 15 new garbage treatment facilities on the basis of market mechanics, Mr. Liang Guangsheng, deputy director of the Beijing Municipal Administration Committee, said at a recent working seminar.
The 15 new garbage treatment facilities include three sanitary landfill sites, seven comprehensive garbage treatment plants, three garbage incineration facilities and two garbage transfer stations. By the year 2008, Beijing's garbage treatment capacity is expected to reach 12,500 tons per day.
Liang pointed out that Beijing is trying to convert from the traditional government monopoly on municipal waste treatment to setting up a fair play platform that encourages foreign investment and domestic social investment on municipal waste by way of a franchise system.
(Source: China Environmental News, 12/08/2003 - Translated by Wang Yi)
5. China Will Further Open Foreign Investment Areas
On the ‘21st Century Forum’ held on December 17, 2003, Mr. Zhang Xiaoqiang, the Vice Minister of the National Development and Reform Commission (NDRC), pointed out that China would further open foreign investment areas.
China not only welcomes the big enterprises to invest in China, but also encourages the middle and small enterprises from other countries to invest in China. Foreign investors are especially welcome to invest in modern agriculture, labor-intensive export processing industry, high-tech industry, equipment manufacturing industry, large power plant and new energy, expressway and port, oil and chemical projects, the urban public utilities for business operations, the reform and upgrade of the traditional industries such as the light industry and textile, and the new services industries such as education, culture, entertainment and medical care.
Mr. Zhang said that China welcomes various ways of foreign investment such as joint ventures, private-owned enterprises, investment companies, investment fund, BOT, project financing, share, merge and acquisition, leasing, buying stocks and transferable bonds etc.
(Source: Financial News, 12/18/2003 - Translated by Peng Aiqun)
6. Overview of China’s Petrochemical Industry
China's old coal-fired power stations are causing severe pollution problems, especially in the urban areas, and the Chinese Central Government is keen to convert these stations to gas to alleviate the problem. China has therefore embarked on a major expansion of its gas infrastructure to transport gas from the country’s western gas fields to the eastern population centers. Demand for natural gas is projected to triple by 2010 (to 96.3 bcm3), in particular demand in Jiangsu, Zhejiang and Shanghai is projected to rise to 31.2 bcm3 by 2015.
A combination of increased domestic production and the import of gas by pipeline from Russia would meet gas demand. Investment for the trans-China gas pipeline is estimated to be USD 6.7 billion and infrastructure investments including gas distribution networks is estimated to be USD 12 billion. Expansion of China’s infrastructure will create many opportunities for foreign investment and foreign partners are being sought for both upstream and downstream projects.
Refinery:
China has a total of 95 major oil refineries (56 operated by SINOPEC, 39 by CNPC) with a total handling capacity of 4.27 mbbl/d. Most dated from the 1950's and 1960's and were designed to handle domestic crude. Many substandard and inefficient small plants have been closed in order to make better use of resources (Since 1999 China closed down over half its small refineries).
Oil refining capacity will hit 270 million tons over next five years. The output capacity of ethylene will exceed 9 million tons.
No new oil refineries would be considered for approval in China until at least 2007. The emphasis will instead be on refurbishment, upgrade and modernizing of existing plant and processes. China lacks adequate refining capacity suitable for heavier Middle-East crude, which will become a necessity with increasing imports.
(Source: China Petrochem, Vol 56, 12/23/2003 - Translated by Wang Ling)
Bidding Opportunity:
GEF/UNDP Demonstration for Fuel Cell Bus Commercialization in China
The United Nations Development Programme (hereinafter referred to as UNDP) has agreed with the Government of the People’s Republic of China in carrying out above-mentioned project, and the Chinese Government will execute the project. The Ministry of Science and Technology of China (hereinafter referred to as MOST) shall act as the implementing agency of the Chinese government, and that Ministry shall be represented in tendering and contractual matters connected with the project by The China International Center for Economic and Technical Exchanges (hereinafter referred to as CICETE), the address of which is shown below.
CICETE now invites sealed bids from eligible Bidders for the following vehicles:
Bid No.: ICEB-B01G3101
Item: Fuel Cell Bus
(Details and specifications will be provided in the Bidding Document.)
Interested eligible Bidders may obtain the more information from CICETE and can inspect the documents at the address below from 08:30-16:30(Beijing Time) from Dec. 19,2003.
The Bid Document in English shall be purchased by the interested eligible Bidders on notifying CICETE in writing at the address upon payment of a nonrefundable fee of RMB 5,000 or US$605. Payment can be made by cash, casher’s check or direct deposit to CICETE’s account. The Bid Document may be delivered to the Bidder by courier for additional fee of RMB 400 or US$ 48. No liability shall be accepted by CICETE for loss or late delivery.
Sealed bids will be received at below address until 10:00am on March 18, 2004 and then publicly opened.
CICETE will not be responsible for any costs or expenses incurred by Bidders related to the Bid preparation and delivery.
CICETE will evaluate the bids in accordance with the provisions in the Bid Document.
Procurement Division
China International Center for Economic and Technical Exchanges
No.18 Bei San Huan Zhong Lu, Beijing, China
Tel:86-10-62049988/62020687 Fax:86-10-62011328
Attention: Jia Jinlong
E-mail: procurement@cicete.org
Consulate News: Shenyang
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 Shenyang.
USFCS Shenyang is now recruiting for WESTEC Advanced Productivity Exposition (Los Angeles March 22-25, 2004), North Americans largest trade show for exhibition of machine tool and material handling equipment. The trade delegation will be arranged through the USFCS International Buyer Program. Readers interested in meeting with the Chinese companies at the expo are encouraged to contact Ms. Liu Yang at yang.liu@mail.doc.gov.
For more information on CS Shenyang and the Shenyang consular region, visit our website at
http://www.buyusa.gov/china/en/Shenyang.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.