Australian Trade Minister: Chinese products "safe"

Australian Trade Minister Warren Truss said here Tuesday that Chinese products and food are safe, and Australia treats them exactly the same as products coming from any other country in the world.

"To me they must be safe, otherwise they won't be allowed into Australian market," Truss said in an exclusive interview with Xinhua on the sidelines of the ongoing Asia-Pacific Economic Cooperation (APEC) leaders week in Sydney.

"When we come to Chinese products coming into Australia, we treat them exactly the same as products coming from any country in the world," he said, adding "these products and foods coming into Australia have to meet the same standards as Australian products and foods that are supplied to Australian consumers, and the same as Japanese foods and products supplied to our consumers."

Truss stressed Australia does not have "any particular, special kind of restrictions done for Chinese products that are not done on other countries."

The minister said China is a very important trading partner of Australia, and soon China will be Australia's No. 1 export market. 　

"We prize our trade relations with China very highly, and that's why we'd like to have a free trade agreement with China to underpin that trade and help build cross-border contacts," he said. 　

Statistics shows that in 2006, trade between China and Australia amounted to 32.9 billion U.S. dollars, up 20 percent from the previous year. China is currently the second largest trading partner of Australia while Australia is China's ninth.

In the first six months of 2007, bilateral trade reached 19.5 billion dollars, a 35 percent increase over the corresponding period of 2006.

On Monday, Chinese President Hu Jintao started a state visit to Australia, which is expected to further boost bilateral relations including trade.

China reconsiders anti-dumping duty on Russian chemical supplier

China is reconsidering the necessity of imposing anti-dumping duty on a Russian caprolactam supplier, the Ministry of Commerce announced on Monday.

Kemerovo Joint Stock Company "AZOT", a major chemical plant in west Siberia, filed in July an application to the ministry for a re-examination of the anti-dumping duty on its caprolactam, a white crystalline cyclic amide used in the production of nylon, the ministry said.

The company claimed that it had reduced dumping to China, and the primary evidence it offered complied with China's relevant regulations and rules; its application was accepted and the re-examination work started on Monday, the ministry said.

China started to impose anti-dumping duties on the imports of caprolactam from companies in Japan, Belgium, Germany, the Netherlands and Russia from June of 2003, as an earlier investigation found that dumping by these companies had done substantial damage to the domestic industry.

The Ministry of Commerce decided that exports from these caprolactam suppliers to China are subject to anti-dumping duties for five years, with the tax rate ranging from 5 to 28 percent. The rate on Kemerovo Joint Stock Company is 9 percent.

China reassures foreign media toy quality with factory tour

Amid agonies by a string of safety issues with its exported products and food, China opened on Tuesday a toy testing lab and three toy factories to a group of domestic and foreign reporters to put off the concerns.

The Jetta (China) Industry Co. Ltd, the largest toy manufacturer the media group visited in the one-day tour with more than 10,000 employees, showed to reporters how it tested toys.

"A doll is normally tested for 10,000 times whether it can smile and cry as designed, and we have an employee specially in charge of testing this function," introduced a staff member from Jetta.

Details like the doll's laughing and crying time were recorded each time it was tested. Other than that, the company also perfected its quality control system with the tests on raw materials, examination of designs and monitoring of the production process.

Jetta exported 3,232 batches of toys worth more than 42 million U.S. dollars in the first seven months of this year mainly to the United States and European Union, with 70 percent flowing to the former.

All located in south China's Guangdong Province, which produces70 percent of China's exported toys, Jetta and the other two toy factories seemed to have impressed the reporters in a positive way.

"The tour really offered us a good opportunity. The factories we visited today were very strict with the quality of their products and the toys were good," said Jumpei Yoshioka, a reporter from Japan's NHK TV station.

First time in such a trip in China, Yoshioka hoped that he could go to more factories to get a deeper and wider knowledge of the country's toy-making industry, which was just lashed by a toy recall crisis.

"I want to find out whether other factories have quality problems or are as good as these ones," he said.

In July, U.S. RC2 Corp. and Consumer Product Safety Commission filed a recall case involving toy trains made by a Guangdong-based company which used paint containing lead poisonous to children.

On Aug. 2, another U.S. toy company, Fisher-Price, also recalled more than one million character toys with unqualified paint. The producer's paint provider made the paint with fake materials.

Some small factories do have quality problems, often caused by incaution when buying raw materials like paint, fill-in cotton and leather, said Wang Xin, an official with the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) who accompanied the media group.

"We will tighten supervision over these factories and punish those discredited ones heavily," Wang said.

But mostly, the problems are caused by foreign brand owners' improper designs or inconsistent testing standards among different countries, he noted, adding that importers should share the responsibilities in case of false designing.

TS Wong, board chairman of Jetta, pointed out that the recall issues were just individual cases about individual companies.

China's whole toy industry is healthy and quality-guaranteed, and our exports won't be affected, except that the recall cases will prompt us to further improve the quality control system, Wong said.

Cen Jianming, a staff member from Jetta, told the reporters that the factory had a sophisticated screening process to ensure the safety of its raw materials.

"After the paint is bought, it will be isolated in a special room and spot checked with the standards of importing countries. If it's unqualified, we will return the whole batch to the supplier," Cen said.

With a variety of products from motor-driven toys to fluffy dolls, Jetta has an entire professional team checking hidden defects.

"As what we have seen from the three factories, Chinese enterprises do care about their product qualities and have strict quality control systems," said Pascal Golomer, chief reporter from France 2 TV station.

The media tour, co-organized by the General Administration of Quality Supervision, Inspection and Quarantine and State Council Information Office, was the third of its kind in the past three months after China was besieged by frequent product safety scares.

The scares ranged from pet food to drugs, toothpastes, aquatic products, toys and tyres.

The Chinese government has taken a series of measures to improve product quality, including landmark recall systems for unsafe food products and toys and a four-month nationwide campaign to improve product quality initiated late in August. (Hao Yalin also contributed to this story)

China's natural color cotton increasing in popularity overseas

China's natural color cotton industry has received a boost with news that contracts involving 8,000 tons of cotton have been signed with overseas business representatives at an ongoing trade fair in northwest China's Xinjiang region.

"Two companies from India and Pakistan have signed contracts worth 197 million yuan (26 million U.S. dollars) with us," said Yu Wanchun, chief executive officer of China Colored-Cotton Group based in Xinjiang, the world's biggest production base of natural color cotton.

Exports to South Asian countries account for one third of the total of the company's exports, said Yu, adding that cotton merchants from the United States, Sri Lanka and Sweden were also showing interest in Xinjiang's color cotton.

Jayant B. Shah, of Gilla Co Pvt Ltd. in India, said India's demand for the color cotton was rising along with people's awareness of environmental protection.

"The color cotton does not need to be dyed and will not cause pollution in processing," said the Indian merchant, at the five-day economic and trade fair held in Urumqi, capital of Xinjiang, which began on Saturday.

"Color cotton-made garments do no harm to human bodies and thus are becoming increasingly popular among consumers," said the businessman.

China produces about 30,000 tons of natural color cotton each year, accounting for nearly 60 percent of the world's total. Ninety-five percent of China's color cotton is produced in Xinjiang, which has an area of 20,000 hectares sown to the crop.

PM: Hungary against EU ban on all Chinese toys

Visiting Hungarian Prime Minister Gyurcsany Ferenc on Tuesday voiced opposition to a possible action by the European Union (EU) to ban all Chinese toys into European market, saying it's not a "fair play".

"Unqualified goods should be banned away from the market and its producer is supposed to be responsible for that. However, to ban all the kind of products from some country is not a fair play," Gyurcsany said at a press briefing.

He also urged the Chinese government to tell its producers to follow the EU rules and standards, which are set to protect all consumers.

China has suffered a string of safety scares with its products at home and abroad, which included tainted wheat gluten for pet food and children's toys found to contain excessive lead.

"What's behind these critics are anxieties of China's rapid economic and social growth," Gyurcsany said, adding that the mainstreams are the respect to the achievements China has made in recent years.

More and more Hungarian people prefer to choose Chinese clothes and goods, and a trade center for Chinese brands will be built in Hungarian capital of Budapest, the PM said.

Gyurcsany arrived here on Sunday, kicking off an official visit to China from September 2 to 5 as guest of his Chinese counterpart Wen Jiabao.

He also attended an opening ceremony of the Hungary Festival on Monday, a series of activities slated to be held in major Chinese cities between September 2007 and April 2008.

Apart from Beijing, Gyurcsany will also visit China's financial hub of Shanghai.

Deutsche Bank: U.S. subprime crisis has limited impact on China economy

China can still maintain robust economic growth even if the subprime credit crisis slowed down the U.S. economic growth, according to the Deutsche Bank AG.

"China's economic growth rate would be less than one percentage point lower if that of the U.S. slowed down by one percentage point," said Ma Jun, chief economist for Greater China at Deutsche Bank AG in Kong Kong, said on Tuesday.

China's economy can still easily grow more than 10 percent if the U.S. economic growth rate slowed to 0.7 percent in the second half of 2007, Ma noted.

China's economy expanded by 11.5 percent during the Jan.-June period compared with the same period last year.

"The U.S economic downturn also has limited impact on the profitability of the listed firms on China's equity markets as a whole," Ma said, adding it can only seriously affect eight percent of the total stock market capitalization in the country.

"Although another major correction of the U.S. stock markets may prompt the H-shares in Hong Kong to slump in the short term, but the robust corporate profit earnings and sufficient liquidity can help them recover more quickly than any other emerging markets even in case of big correction."

"We don't have big worries that the U.S. subprime credit crisis can affect the Chinese economy greatly as well as its stock markets in the middle term," Ma added.

PetroChina signs LNG agreement with Shell

ROYAL Dutch Shell Plc signed an initial agreement with PetroChina Co yesterday for the long-term supply of liquefied natural gas from a project in Western Australia.

Shell will sell one million tons of LNG a year to PetroChina under the 20-year contract. The agreement is conditioned on a final investment decision on the project, the Anglo-Dutch energy giant said in a statement.

The pair will work together to conclude a detailed sales and purchase agreement before December next year.

"Shell is delighted to have secured this strategic agreement with PetroChina, which sets a new benchmark for LNG supplies into China and underlines Shell's commitment to Chinese LNG customers and to the Gorgon project," Jon Chadwick, executive vice president of Shell Gas & Power Asia, said in the statement.

The so-called Gorgon project is led by US oil major Chevron Corp, which has a 50-percent holding. Exxon Mobil Corp and Shell share the balance equally. Amid concern over soaring construction costs, the partners dropped a 2006 deadline for approving the Gorgon project, which contains about 40 trillion cubic feet of gas, Australia's largest-known undeveloped gas resource.

Cleaner burn

China wants to use more of the cleaner-burning natural gas. Natural gas is chilled to make LNG, which constitutes one-six-hundredth of the original volume, for easier sea transport. Globally, strong demand has driven up LNG prices, turning the LNG industry into a seller's market.

China National Offshore Oil Corp, at the forefront of China's efforts to promote LNG use, started shipping in China's first LNG imports from the Woodside Petroleum Ltd-operated North West Shelf venture in Western Australia last year. CNOOC scrapped an initial agreement in 2005 with Chevron to buy LNG from Gorgon because of a price disagreement. To feed its terminals, CNOOC has to make some spot LNG purchases, whose prices are typically much higher than the contract price paid to North West Shelf.

Shell and PetroChina declined to disclose commercial terms of the deal. PetroChina shares fell 0.18 percent yesterday in Hong Kong to close at HK$11.44 (US$1.47) amid concern over higher LNG contract prices.

Oil refiners told to avoid shortfalls

THE Chinese government has ordered PetroChina Co and China Petroleum & Chemical Corp to increase fuel production, imports and distribution to end shortages in provinces, including Fujian and Heilongjiang.

The nation's two largest oil refiners have been told to prevent a repeat of shortfalls seen in August, Bi Jingquan, vice chairman of the National Development and Reform Commission, the nation's top economic planner, said in Beijing yesterday.

Increased refinery runs to meet government requests for additional supply may deepen losses from processing oil at PetroChina and Sinopec, as China Petroleum & Chemical is known. The state controls prices of diesel and gasoline to curb their impact on inflation, which climbed to a 10-year high in July, Bloomberg News said. Benchmark New York oil prices rose to a record in August.

The state wants to "narrow the gap between domestic fuel prices and global levels," Bi said. Any decision by the government to raise prices would depend on international oil costs and the affordability of fuel for Chinese society, he said.

Sinopec's refineries are operating at a loss in the second half and aren't able to make a profit processing crude unless oil falls below US$64 a barrel, officials from Asia's largest refiner said on August 31.

Auto parts giant plans Chinese acquisition

CONTINENTAL AG yesterday announced plans to acquire Zhangjiagang Fugang Heli Electronics Co Ltd, the first time Continental's automotive division has taken over a Chinese company following a series of mergers overseas.

The acquisition is expected to further help Continental, Europe's second-largest auto parts maker, to diversify its product portfolio from braking systems and become an integrated systems supplier.

The deal is subject to regulatory approval.

Fugang Heli, founded in 2005, makes cooling fan modules and window lift motors and has around 250 employees.

In 2006, the Zhangjianggang, Jiangsu Province-based company achieved sales of 84 million yuan (US$11.2 million). It runs two production facilities serving major domestic car makers such as FAW Volkswagen and Chery.

"With the acquisition of Fugang Heli, Continental Automotive Systems will enhance the local production capability in order to better meet the demand of OEMs in China," said Karl-Thomas Neumann, president of Continental Automotive Systems and a Continental AG executive board member, referring to original-equipment manufacturers.

"It will be a new base for export into other regions in Asia based on cost-competitive manufacturing."

The deal in China, considering a driving force in the Asia-Pacific region, came after several similar acquisitions on the global market as the company took on rivals like Bosch AG.

In mid-August, Continental spent 11.4 billion euros (US$15.5 billion) to buy Siemens VDO Automotive AG in the biggest acquisition of its 136-year history, nearly one year after acquiring the automotive electronics division of Motorola.

A month earlier, Continental announced it will invest 48 million euros to build an automotive engineering center in Shanghai, which will also host its Asia headquarters.

ThyssenKrupp sees 10% jump in China

GERMAN industrial powerhouse ThyssenKrupp AG expects sales in China to grow an average 10 percent annually over the next five to 10 years, fueled by elevators, automotive parts and industrial services, its China operations senior executive said yesterday.

The steel business, which accounts for more than half of its sales in the market, is expected to fall below the overall average growth rate as it is unlikely the company will make any further large-scale investment due to policy limits over foreign companies' participation in the sector.

The government bars overseas firms from taking a majority stake in steel production companies, while they are allowed to control steel processing firms.

"When the opportunity is good we will continue to expand," said Alfred Wewers, president and chief executive officer of ThyssenKrupp China, after a briefing in Shanghai.

An expansion in production capacity would help the company export from China, where present output is mostly for domestic customers, he said.

The plans may include new plants for elevators and escalators. The company imports many of these products from its overseas plants for use in China, sometimes "at the request of customers," although it has two Chinese mainland factories.

China installs 60,000 elevators and escalators every year, accounting for 20 percent of the global market.

China needs at least 300 helicopters by 2015: experts

China will need at least 300 helicopters by 2015, and the demand could exceed 1,000 aircraft with the rapid development of China's economy, senior officials from Eurocopter, the world's largest helicopter manufacturer, said in Hong Kong on Tuesday.

When attending the Asian Aerospace International Expo and Congress 2007, which kicked off here on Monday, Olivier Lambert, senior vice-president of Eurocopter, said that Eurocopter's current success in the civil and parapublic sector in China is an excellent jumping board for increased business considering the enormous potential of the Chinese market.

"Olympic Games in Beijing 2008 and the World Expo in Shanghai 2010 are just two events which show China's need for helicopters as a public service tool," he said.

Norbert Ducrot, senior vice president of Eurocopter, said at a press conference that at present, China has a strong will to boost its capacities in public service missions such as homeland security, emergency medical services, emergency and disaster relief, fire fighting, environment monitoring, etc..

During the Fourth China International Salvage Conference in Hainan province in south China recently, the Rescue and Salvage Bureau emphasized the need to boost China's search and rescue capabilities, he said.

The bureau aims to triple its fleet to comprise of 24 helicopters by 2015, he said.

To sustain the growth of such a huge market in China, Eurocopter vouches to work hand in hand with Chinese administrations, private operators and industrial partners throughout their activities, Ducrot said.

Founded in 1992, Eurocopter, a 100 percent subsidiary of the European Aeronautic Defense and Space Company, is the world's largest helicopter producer, accounting for more than 50 percent of the turbine helicopter fleet in service in Asia.

Oil price hikes in China ruled out

The country's two biggest oil companies have not asked the government to raise prices of their refined products as reported by some media, a senior planning official said Tuesday.

"We haven't received any application from Sinopec or China National Petroleum Corp to raise prices of finished oil products in response to rising global crude prices," Bi Jingquan, vice-minister of the National Development and Reform Commission, said.

The two refineries had made profits in the January-July period, he told a press conference in Beijing.

Zhang Zhiguo, a senior media manager with Sinopec, told China Daily yesterday that his company began to lose money in June, but the losses have not yet offset the profits made this year through May.

Analysts said that any hikes in refined oil prices would further push up inflation, which has risen largely because of food prices.

Bi said the government will continue to reform the pricing system for oil products.

"China's crude prices have been linked to international markets, and we will reform finished oil product prices based upon that - that is the direction."

Price revisions will take into account international oil prices and affordability of all aspects of society, he said.

The official said the commission had asked the two oil giants to increase production and imports to ensure supply in Fujian and Heilongjiang provinces, which suffered oil shortages last month.

Overall, the country's oil demand and supply is balanced and the market is stable, he said.

Baosteel seeks more acquisitions

China's largest steelmaker Baosteel is seeking to more than triple its steel output from 23 million tons to 80 million tons by 2012 by acquiring other producers in a national industry restructuring drive.

It also expects to boost its sales to over 50 billion U.S. dollars a year and profit to over 5 billion dollars by then, according to an internal newsletter.

Baosteel, the world's fifth-largest steelmaker, also said in the newsletter that it aims to be one of the world's top three producers in terms of competitiveness.

"Baosteel has to increase its output, mainly through mergers and alliances with other mainland companies," Xu Lejiang, president of Baosteel, was quoted as saying in the newsletter.

"Baosteel will mainly focus on strategic cooperation, including product complementation, with prospective partners. Some other factors like scale of operations, location and costs are also being considered," Chen Ying, board secretary of Baosteel Co Ltd, told China Daily.

Chen declined to comment on market rumors about Baosteel's impending acquisition of Jiangsu Shagang Group, a steel producer based in smaller eastern city ZhangJiagang.

Liu Baoyao, an analyst at Guangfa Securities, said Baosteel's targets should not be hard to meet at the company's current pace of growth.

Liu said Baosteel's Zhanjiang project, which is expected to get the government's approval soon, is likely to boost the group's output by 20 million tons by 2012.

"Besides, Baosteel's holding company Bayi Iron and Steel has an annual capacity of 3.6 million tons. Baosteel's joint venture with Handan Steel is also expected to bring Baosteel an annual capacity of 2.5 million tons," said Liu.

In addition, Baosteel's alliances with Baotou Steel and Ma'anshan Steel, which may lead to a merger in the near future, is also likely to bring Baosteel around 7.5 million tons in output, said Liu. "Baosteel is also expected to reduce the manufacturing costs by exploring mines overseas."

In 2005, the National Development and Reform Commission set new targets for China's steel industry. It said the output of the nation's top 10 steelmakers should account for over 50 percent of the country's total output by 2010 and over 70 percent by 2020.

NDRC releases natural gas utilization policy

The National Development and Reform Commission (NDRC) published its policy on utilizing natural gas yesterday, the Beijing Youth Daily reported today.

The document is aimed at relieving the tension between natural gas supply and demand, optimizing natural gas consumption structure, improving energy efficiency and cutting pollutant emissions as well. All activities using natural gas in China will have to follow this policy.

NDRC categorized natural gas usages into four purposes: urban fuel, industrial fuel, electricity generation, and the chemical industry.

Meanwhile, considering comprehensive social, environmental and economic benefits, the utilization of natural gas falls into four categories: preferred, permitted, restricted, and forbidden.

Urban fuel gas appears in the preferred category. Meanwhile, methanol made from natural gas, base-loaded natural gas electricity power stations, as well as liquefied natural gas projects fueled by large and medium gas field are all listed in the forbidden category.

With respect to projects consuming natural gas which have already been built, their supply will remain at current level. State approved fertilizer projects are also guaranteed with a long-term and stable supply.

For areas severely short of natural gas supply, coal is the recommended substitute for natural gas if it is feasible.

For projects using natural gas under construction or already licensed, if a contract has been inked between the buyer and supplier of natural gas, the contract will be executed as it is agreed on. There will otherwise be no exceptions to the policy for new natural gas projects or natural gas fields.

NDRC official rebuffs economic overheating notion

Though China's national economy has surged on an even faster track so far into this year, it offers no ground for the judgment of an overheating economy yet, Bi Jingquan, deputy director of the National Development and Reform Commission, was quoted yesterday as saying.

Despite the 3.5% spike in CPI between the Jan.—Jul. period compared with the same time of last year, the overall prices of consumer goods still remain under control, with no signs of severe inflation.

The original 3% CPI target for this year was set on a predictive and directive basis, tolerant of normal swings on both sides.

No application for oil products price hike from CNPC, Sinopec, official

China's price regulator National Development and Reform Commission (NDRC) so far does not receive any application for raising product oil prices from the country's two oil giants CNPC and Sinopec, said Bi Jingquan, vice-minister of NDRC, said Tuesday.

There were media reports earlier saying the two oil giants had submitted applications to the NDRC for raising product oil prices following hikes of international crude oil prices.

Bi also said that the two companies made more profits year on year in the January-July period as they were profitable from domestically produced crude and product oil selling and the international crude price was at a relatively low level before March.

He also said the domestic product oil market demand and supply are generally balanced and the market was quite stable.

Kiu Hung to buy coal mine rights in Inner Mongolia

Toy maker and coal mine exploration company Kiu Hung International Holdings Ltd said on Wednesday it would buy the mining and exploration rights of two coal mines in Inner Mongolia in China for HK$840 million ($107.7 million).

Kiu Hung said in a statement that HK$420 million of the purchase would be settled by an issue of new shares at HK$0.70 each and HK$260 million by an issue of convertible notes with a conversion price of HK$0.70 a share. The remainder will be settled by internal resources and banking borrowing, it added.

The Hong Kong-listed company said it would buy the entire Lucky Dragon Resources Ltd from Gold Dynasty Investments Ltd, which is 45 percent owned by Kiu Hung's directors, Dennis Yu and Leslie Kau. Yu and Kau hold 14.34 percent of Kiu Hung.

Lucky Dragon holds the mining rights and operation facilities and properties of the Huanghuashan Coal Mine in Tongliao City, and the exploration rights of Xi Meng Coal Mine in Xilinguolemeng of Inner Mongolia.

Shares of Kiu Hung have risen more than 92 percent so far in 2007 to HK$1.27 prior to a trading suspension on Aug. 16. Trading in the shares will resume on Wednesday afternoon. ($1=HK$7.8)

Starbucks to Source Coffee from China

Starbucks Corp, the world's biggest coffee-shop chain, said it planned to source coffee from China for the first time as it expands in a country with more than 5,000 years of tea-drinking culture.

Starbucks has been working with coffee farmers in China's southwestern Yunnan province to help them meet sourcing standards and has sent coffee shipments to the United States for testing, Starbucks China President Wang Jinlong said at the Reuters China Century Summit on Tuesday.

"China does produce some quality coffee," Wang said at the summit, held at the Reuters office in Shanghai.

He added that sourcing from China would start "very soon, maybe in a couple of years".

Starbucks also plans to build a roasting plant in China, where its sales are outpacing market growth, Wang said, adding that China's coffee consumption is increasing 20 to 25 percent each year.

He reiterated that Seattle-based Starbucks aimed to more than triple its global outlets to 40,000 and expected China to become its biggest overseas market.

Beijing to Issue Rationing Pots for Healthier Oil Intake

The Beijing government will hand out a free special oil pot to every family in the city by the end of the year to help people maintain a healthy lifestyle, the Beijing News reported on September 3.

Chen Zhu, the newly appointed Minister of Health, vice minister Wang Longde, and deputy mayor of Beijing Ding Xiangyang together unveiled a campaign at Chaoyang Park in Beijing to promote healthy living.

Along with the pot, the government will also send out a Healthy Diet Guide and a Infectious Disease Prevention Guide to every residence.

The limiting oil pot to be distributed to every family before the end of this year can hold 530 milliliters of edible oil. This is considered a reasonable portion for a 3-member family to use over the course of a week, according to officials from the Beijing health administration.

Research shows that a healthy adult should not consume more than 25 grams of oil and 6 grams of salt in one day. 80 percent of cardiovascular diseases, diabetes, and 40 percent of tumors can be prevented if people maintain a healthy diet, do proper exercise, and control smoking and alcohol intake.

By the end of June this year, the Beijing municipal government had given out 5 million special salt spoons to citizens for free. The distribution of spoons and oil pots is part of a themed health campaign.

PetroChina lines up Browse LNG deal

PetroChina is expected to sign a head of agreement with Australia's Woodside Petroleum in Perth tomorrow which would see China import 2 million tonnes per annum of liquefied natural gas from the Browse gas project.

The price of the deal is not clear, but sources said the price is based on the market value of the fuel.

The move follows a similar deal the company signed with Shell in Perth today that will see the Chinese giant take 1 million tpa of LNG for 20 years from the Gorgon development.

Shell's deal is understood to have a price structure of $10 per million British thermal units.

The Browse LNG will be shipped to a terminal owned and operated by PetroChina in eastern China's Jiangsu province.

People familiar with the deal said China's top LNG developer China National Offshore Oil Corporation (CNOOC) is also expected to sign a deal with Chevron, perhaps later in the week, covering 3 million tonnes of LNG from Gorgon.

CNOOC will send the Gorgon LNG to a terminal in Zhejiang province, in eastern China. CNOOC is already importing 3.7 million tpa of LNG from Woodside's Northwest Shelf project.

The new deals coincide with Chinese President Hu Jintao's visit to Australia this week for the Asia-Pacific Economic Co-operation forum summit in Sydney.

Pricing reform for China oil giants unlikely

Surging oil prices and rising demand for gasoline and diesel have created a difficult environment for Chinese refiners due to price caps on refined products.

However, any reform in the pricing mechanism is unlikely in the short term, according to officials of China's main economic planning body.

Oil giants PetroChina (0857) and Sinopec (0386) were ordered to increase fuel products last month to end shortages in provinces including Fujian and Heilongjiang, said Bi Jingquan, vice chairman of the National Development and Reform Commission.

The increased refinery runs to meet government requests for additional supply may deepen the firms' refining business losses because they cannot pass the rising cost to consumers. Diesel and gasoline prices are under state control in a bid to curb inflation.

Bi said despite rising oil prices on the world market, both refiners have not requested a price hike.

Officials of PetroChina and Sinopec said they will post a loss in refining business if crude oil prices stay above US$65 (HK$507) and US$64 a barrel, respectively.

"China's crude prices have been linked to international markets, and we will reform finished oil prices [at home] based upon it, that's a set direction" Bi said, added that international oil prices and affordability from all social aspects will be fully consider before the reform is carried out.

Chen Deming, another NDRC vice chairman, said: "Reform of China's fuel prices is a subject worth serious studies ... we can't possibly achieve that in one big step"

Analysts have said a rise in fuel prices or a reform in the pricing mechanism of refined oil products is not possible this year, because the inflation rate already exceeds the government target. A price hike would worsen the situation.

With inflation in mind, electricity prices have also not been fully liberalized - a move which hinders environmental protection and energy saving.

Chen said longer generating hours will be allowed for plants that consume less coal and emit less carbon dioxide and gradually raise tariffs for hydropower to encourage cleaner energy.

China North East Petroleum Holdings Announces a Successful Exploration and Development in HE301 Area

China North East Petroleum Holdings, Limited , a leading oil producing company in Northern China, announced a positive result of exploration in a previously unexplored section of He 301 area, which should significantly increase the production capabilities and reserves of the company.

The four new wells were drilled in a new section of HE 301 that had previously not been explored by the company. Based on the initial results, this area, which is about 3 km. in size, should produce approximately 4,400 barrels of oil per month and add an estimated 5 million barrels of reserves. Previously, the company had 8 operating wells in HE 301.

"I am very glad to see the great results from the new wells," said Mr. Wang, the President of China North East Petroleum. "It gives us great confidence in enlarging the development scope in this area. With these successful new wells, we believe our future earnings ability can be very strong."

"The success of the new wells is a key breakthrough for developing this area," said Mr. Zhang Xiang, Chief Engineer of China North East Petroleum. "From the new wells' logging we can identify a large amount of high quality crude oil deposited under the possible oil bearing area that can be drilled with limited financial risk."

HE 301 is one of four oil producing regions of China North East Petroleum. With the new discoveries, it brings CNEH's projected reserves to 75 million barrels.

About China North East Petroleum Holdings, Limited

China North East Petroleum Holdings, Ltd. is engaged in the production of crude oil in Northern China. CNEH has a guaranteed arrangement with Jilin Refinery of PetroChina to sell its produced crude oil for use in the China marketplace. The Company currently operates 4 oilfields with 110 producing wells in Northern China and estimates generating approximately average 1,600 barrels of high quality crude oil per day. A further well drilling project has been planned in future.

Gazprom nudges Exxon to drop China gas export plans

Russia's gas export monopoly Gazprom said on Tuesday it needs gas from Exxon Mobil's Sakhalin-1 project for domestic use, mounting pressure on the US major to drop plans to export gas to China. Gazprom, which controls another major gas project, Sakhalin-2, off the Russian Pacific coast, said Exxon should take into account Russia's priority to supply the domestic market first.

"Given that nearly all the gas from the Sakhalin-2 project has already been sold under long-term contracts, and other Sakhalin projects are not expected to start production in the middle term, the gas from Sakhalin-1 can be the only source for domestic supplies until at least 2015," said Vladimir Kozlov, head of Gazprom's Sakhalin office.

Speaking at the annual oil and gas conference in the island's capital of Yuzhno-Sakhalinsk, Kozlov said the growing domestic demand for gas in Russia's four Far Eastern regions will reach 13.1 billion cubic metres by 2010 and further grow to 16.0 and 19.2 bcm by 2015 and 2020, respectively.

Sakhalin-1 alone can supply the regions with 3.2 bcm of gas by 2010, and 11.4 bcm from 2015 to 2020, he added. "We are in discussions with Gazprom and have regular meetings with them to explore various options and find ways of mutual cooperation," said James Taylor, executive vice-president of Exxon Neftegas, Exxon Mobil's subsidiary in Russia.

Sakhalin-1 is a production sharing agreement, which excludes the project from Gazprom's legal monopoly on gas exports. It gives Exxon the right to sell the gas to a consumer of its choice, like China, with which the US major reached a preliminary agreement in 2004 on annual supplies of 8 bcm of gas. "Our main principle is economic profitability. So far, we consider the Chinese direction to be the most attractive from the economic point of view," said Margarita Tsoy, the firm's government and public affairs manager.

Gazprom's influence in the region has significantly grown since last year, when the gas firm bought control of Sakhalin-2 from Royal Dutch Shell and its Japanese partners, who were obliged to sell after a campaign of criticism from Russian officials and threats of crippling licence withdrawals. The Sakhalin-1 partners also include Russian state-controlled oil company Rosneft, India's ONGC and the Japanese consortium Sodeco.

Sinopec Tianjin ethylene facility to have first device installed by Oct

Sinopec's Tianjin ethylene plant with designed annual capacity of one million tons will complete installation of its first recycle facility by the end of October, it is learned from the Zhangjiaguang Chemical Electronic Market.

The Tianjin ethylene project, involving a total investment of 27 billion yuan, is scheduled to come into operation by September 2009.

Sinopec (NYSE:SNP, SH: 600028) is the largest ethylene producer in China now.

China's natural gas policy to favour long-term demand-supply balance

China issued a new policy on natural gas utilization at the end of August, and analysts hail this as China's effort to maintain long-term balance in gas supply and demand.

The new policy bans the use of natural gas as raw material to produce methanol, the construction of gas-fuelled power plants at large coal production bases, and the use of natural gas produced by large and medium-sized gas fields as raw material for Greenfield LNC projects.

These prohibitions, as well as other limits stipulated by the new policy, are to curb gas demand, analysts say.

On the side of gas supply, China has signed contracts with its neighbours including Russia, Turkmenistan and Uzbekistan for at least 30 years of gas supply to its northeast and southern regions.

Domestically, China's gas output has increased by an average of 12.63 percent annually since 2001, to 49.3 billion cubic meters by 2005, and the figure tends to rise further in consideration of the three domestic oil giants' new discoveries in recent years.

Analysts believe that limit on demand and increasing supply will reduce its natural gas shortfall and favour the country in LNG import talks.

The next step, the analysts say, is to push gas price marketization, which is the final goal of China's natural gas reform.

The new policy issued by the National Development and Reform Commission classifies natural gas utilization into four categories: residential and urban gas use, industrial fuel, power generation and chemical feedstock, and labels them as categories of Given priority, Permitted, Limited and Banned respectively.

Petsec targets US and China

Australia's Petsec Energy is set to embark on a more active exploration programme in the US and China over the next few months, chairman Terry Fern said today.

Speaking at the 2007 Good Oil conference in Fremantle, Fern said Petsec will drill between three and five wells in the US, beginning with a well in Terrebonne Parish, Louisiana, which will spud this week.

The company will also start production of the six Mobile Bay gas fields, which is expected to increase current production in the area by 50%.

In China, Petsec will start the drilling of between four and six wells in November, followed by the anticipated final investment decision on developing the Roc-led 6-12 South oilfield

Fern said Petsec had achieved a compound annual growth rate of 38% in reserves over the last five years.

"This growth came from the Gulf of Mexico region and China - the same areas we are focusing on in the coming months with our active exploration and development programs," Fern said.

Long Process To Link Oil Prices With International Market

China has a long way to go before it can link its oil products prices with the international market, a senior official of the country's top economic planner said Tuesday.

"The linkage of China's oil prices with international market will be a gradual process because it will take a period of time for Chinese farmers and urban low- income people to accept the prices," Chen Deming, a vice chairman of the National Development and Reform Commission, told a news conference.

China's gasoline, diesel and kerosene prices are controlled by the government. Gasoline prices in China are slightly lower than in the U.S., said Chen.

Pacific Asia China Energy venture wins US$2.7M Chinese coal mine degas work

Pacific Asia China Energy Inc. (TSXV:PCE) said Tuesday its PACE Mitchell Drilling Corp. joint venture has confirmed a contract worth up to US$2.7 million for degasification at the Yunnan Weixin Guanyinshan coal mine in Kunming, China.

PACE Mitchell Drilling, a 50-50 venture with Mitchell Drilling Corp. of Australia, is to drill one or two sets of horizontal wells to degasify a block measuring two kilometres by 200 metres, reducing the methane gas content to a safe level for tunnel work.

The contract value is US$1.4 million, rising to US$2.7 million if mine owner Weixin Yuntou Yuedian Zhaxi Energy Co. exercises an option for a second vertical well with two laterals into the seam.

Drilling is to begin by early October, with project completion scheduled for December.

The contract "demonstrates the confidence PACE Mitchell is gaining from coal mining officials as they seek a reliable and viable alternative for degasifying their coal mines," stated PACE president Tunaye Sai.

Chinese officials are moving to abate explosive methane levels in the country's coal mines, which are among the world's most hazardous workplaces.

In addition, degasification recovers coal mine methane as a clean-burning energy source, while reducing air pollution.

200-mln-ton Caofeidian coal terminal kicks off

The first-phase project of Caofeidian port coal terminal, located in Tangshan, Hebei province, has kicked off recently, with total designed outbound shipment capacity of 200 million tons after its completion, allowing the port to become another important north-to-south coal-shipping base.

The designed capacity of the first-phase project, to be put into operation in 2008, is 50 million tons and planed to rise to 200 million tons after future extension projects are completed, involving estimated investment of over 100 billion yuan.

Coal prices stayed flat at high levels (Aug.27-31)

The summer peak season for coal demand was drawing to end this week, but the continuous hot weather across the country pushed up electricity demand, leading to robust thermal coal consumption.

According to relevant data, the coal stocks of national major power plants reached 27.54 million tons as of Aug 26, with daily consumption of 1.84 million tons, an increase of 1,000 tons over the previous week. Based on daily consumption indicators, the coal stocks were at a 14-day supply.

The coal market started to become flat this week after consecutive weeks of upward momentum, except for continuous price hike in premium steam coal and coking coal in some parts of the country. It is expected that electricity and coal demand will tend to drop after the onset of September when the weather becomes cooler, and the coal market will swing to a stable momentum.

QHD Port: the port stockpiled 4.37 million tons as of Aug 26, a decrease of 8,000 tons over Aug 17 but still at a reasonable stock level. Premium steam coal prices continued to rise due to the low stock level. The prices of Datong Premium Mix (6000 kcal/kg) increased by 5-6 yuan/ton; while those of Shanxi Premium Mix (5500 kcal/kg) rose 4-5 yuan/ton.

Areva wins contract to interconnect Chinese, Russian power grids

Areva said its Transmission and Distribution (T&D) division has signed a 'multi-million euro' contract to supply H400 High-Voltage Direct Current (HVDC) thyristor valves to interconnect China's power grid with that of Russia.

The French group said the contract was the first of its kind awarded to Areva T&D in China and was signed with the Xuji Group Corporation and China Electric Power Research Institute on behalf of the end customer, State Grid of China Corporation.

Areva said the valves will be installed in the Sino-Russian converter station located in China's Heilongjiang province. To overcome the countries' grid incompatibility, the station will convert alternate current into direct current and inversely, the company explained.

Infinera supports North China power grid

North China Grid Company Limited (NCGC) partnered with Sunnyvale, CA-based Infinera to deploy a DTN system supporting next-generation, complex, capacity-intensive communications and monitoring of its power grid. NCGC powers economic and social centers across northern China, including Beijing, reaching more than 200 million people.

Wuhan NEC, Infinera's China partner, supported network implementation with sales, installation, and testing services. NCGC will use Infinera's digital optical networks architecture, based on its monolithic large-scale photonic ICs, to monitor and ameliorate its power grid performance, support employees with information systems, and facilitate remote employee education and remote facilities monitoring via video.

The Infinera system features 100 Gbits/sec. data capacity per line card, integrated GMPLS intelligence, and SDH-like digital performance monitoring. Other benefits include add/drop management that boasts flexibility and cost-effectiveness, and sub-wavelength bandwidth management for higher reliability.

China's renewable energy targets will include large-scale hydro

China's plans to lift the proportion of renewable energy in its total energy mix to 15 pct by 2020 will be aided considerably by large-scale hydropower development in the country's southwest, said a senior state planner.

Chen Deming, vice-director of the National Development and Reform Commission (NDRC), told reporters that China aims to lift total hydropower capacity to 300,000 MW by the end of 2020, from around 129,000 MW at the end of last year.

At a news conference on China's renewable energy plans, Chen acknowledged that the rapid development of large-scale dams and reservoirs in the southwest has been met with intense criticism. 'There are some international non-governmental organizations who have criticized our hydropower development,' he conceded, 'but according to our knowledge and experience, we feel that even though it can bring about some impact to the environment, the more important factor is its contribution to reducing energy, atmospheric and environmental pollution.'

International environmental groups such as Greenpeace have said that large-scale hydropower plants such as at the Three Gorges on the Yangtze River could have an even bigger impact on the environment than conventional thermal power plants.

Apart from the effects on the local climate brought about by the rapid impoundment of a reservoir stretching more than 600 km, the submerging of trees and other plant life could also release massive amounts of carbon dioxide into the atmosphere, Greenpeace has said.

Experts have also questioned how China and other nations are including large-scale hydropower development to meet their targets.

'It's possible that China could meet its renewable energy targets by large hydropower alone, without even doing anything else,' said Christopher Tung, a renewable energy specialist with the legal firm, Mallesons Stephen Jaques.

'If you strip out hydropower, they have much more work to do,' he said.

The NDRC's Chen told reporters that it is international practice to designate hydropower as a renewable energy.

He also insisted that its benefits would outweigh the costs.

'The environmental impact of hydropower can be controlled,' he said. 'And while paying close attention to the environment and to the relocation of migrants, we will continue to develop the industry.'

Ningxia Power Group and Mitsubishi Corp. inked CDM agreement

On August 30, Ningxia Power Group and Japan's Mitsubishi Corp. signed Taiyangshan Wind Farm Project's CERs purchase agreement in Yinchuan, capital city of Ningxia, following the two sides signed another 1 MW wind turbine group technology transfer cooperation agreement. The new cooperation marks their joint efforts to control carbon dioxide emissions and will significantly promote development of new energy in Ningxia.

China Aug CPI Growth Likely to Exceed July Level

China's consumer price index (CPI) growth in August is likely to exceed the 5.6 pct reported in July, the official China Securities Journal reported, citing Bi Jingquan, vice director of the National Development and Reform Commission (NDRC).

The CPI growth in July was the highest single-month level since February 1997.

China is due to release CPI data for August on Sept 11.

Bi noted that the target CPI growth of 3.0 pct for 2007 is a goal set at the beginning of the year, and it is normal for actual price growth to exceed targets.

Earlier, central bank vice governor Su Ning said that even if measures in place to control price hikes are taken into account, it is likely that inflation this year will be over 3.0 pct.

Costa Rican Trade Minister to Attend Trade Fair in China

A Costa Rican delegation led by Foreign Trade Minister Marco Vinicio Ruiz will attend an investment and trade fair in Xiamen in east China's Fujian province from Sept. 8-11, Costa Rica's Foreign Trade Ministry said on Tuesday.

This will be the first time the Central American country takes part in an international investment and trade fair hosted by China.

Ruiz is expected to deliver speeches on the investment environment and infrastructure construction projects in Costa Rica in order to showcase his country's competitiveness as an investment destination and an ideal gateway to trade and businesses in the whole Central American region.

Trade and development promotion institutes in Costa Rica will also bring along information on trade and investment possibilities in their country at its exhibition area.

The bilateral trade volume between China and Costa Rica in 2006reached 1.08 billion U.S. dollars and China has become Costa Rica's second-largest trading partner, according to the statistics from the Costa Rican Foreign Trade Ministry.

The Costa Rican government has expressed hope that trade with China could double over the next three years.

China Vows to Develop Medium & Long-term Renewable Resources

Rapid economic development worldwide is consuming large amounts of resources at present, resulting in severe pollution problems caused by the rapid growth of resources consumption.

The issue has aroused the attention of governments of different nations all over the world. The Chinese government is also making great efforts in this regard, lately releasing a medium and long-term plan to increase its share of renewable resources with regards to national energy consumption.

A senior official has revealed that China plans for a tenth of its energy to come from renewable resources, which include hydro, solar, wind and bio-energy, by 2010, and fifteen percent by 2020, as compared to the present share of only seven percent.

According to the Development Plan of Medium and Long-Term Renewable Resources passed by the central government in early June, it aims to utilise renewable resources to an amount equal to 270 million US dollars worth of coal by 2010, with hydropower, wind and bio-energy top of the agenda.

Chen Deming, vice-minister of the National Development and Reform Commission (NDRC) said at a news conference in Beijing, that the Chinese government is determined to realise the set goal.

"As a large country of great responsibility, like many other nations, China must take full advantage of utilising renewable resources and adjust our energy structure. The target we set, which has been seldom made by other countries, is a large challenge and foreseeable to us as well."

Chen Deming said besides being environment-friendly and able to ensure energy security, renewable resources, particularly bio-energies, can help boost farmers' income as bio-diesel and ethanol consume chaff as feedstock.

The official added that China is rich in renewable resource energies, having 540 million megawatts of hydropower, the surplus of agriculture and forestry products equaling 500 million tones of coal every day and large amounts of wind power as well.

He said that the abundance of these resources clearly assures a stable and long-term supply of green power for the development of the country.

As to the merits of these clean energies, Chen Deming said it is of great significance to overall economic progress in the future.

"First, remote areas and some villages in the country, that have not been included in the national electricity grid, can be vitalized by utilising renewable resources. Secondly, it can also help alter the economic structure and growth mode of China. Thirdly, green power is conducive to realising the target of an innovative country."

However, according to the NDRC, a number of difficulties also exist in this regard as the decentralisation of various green powers require vast lands and technology support.

China is endeavouring to resolve the issues as the government encourages the use of wind and solar power, which presents more favourable conditions. In addition, preferential policies in regards to financing and tax will also enhance the share of national energy consumption.

NDRC: China Takes Measures to Stabilize CPI Growth Rate

In the first seven months of the year, China's consumer price index, a major inflation measure, rose 3.5% year-on-year.

Economic officials also note the 5.6% increase recorded in July, marking its highest single-month record in 10 years.

China's top economic planner attributes the hike to foodstuff prices soaring, indicating that China has taken measures to stabilize its fluctuations.

Though the risk of overheating is present, officials say it's being limited in certain sectors, and therefore there is no serious inflation in the domestic economy.

Bi Jingquan, Vice Chairman of the National Development and Reform Commission, says the hike in foodstuff prices changes in step with an increase in the international food market, and that Chinese consumers' demand for meat is merely keeping pace with the advanced living standards.

"From January to July this year, the average increase of CPI was 3.5% compared with the same period last year, among which 2.9% was driven by the price hike in food."

The Central Bank revealed last week that, since month-by-month increases are currently at 5.6 percent, although the government has taken more measures in this regard, the CPI this year will likely exceed the target growth rate of 3 percent.

The NDRC describes the central government as having attached high importance to the non-staple foods price hike. At the end of last month, China launched a special task to curb rising food costs, which includes providing subsidies for farmers and improving pensions and allowances for the retired and low-income households. As a result of that, during the last three weeks, the average wholesale meet price has seen a week-on-week drop.

Given the pressure by the upcoming Golden Week holiday on consumer demands, the official indicates that the price may fluctuate in the coming months, but in the long run, it will remain stable.

In response to suspicions that China is on the verge of imminent inflation, Bi Jingquan rules out the possibility of rampant inflation, saying though China has some structural imbalances, the government is keeping a sober mind to put inflation under control.

"We can judge from our current economic performance that the overall demand and supply is in balance. We are only suffering from some structural shortages of supply. Only when the overall demand greatly outnumbers the supply can we say there are serious problems of inflation."

But he also warns that there is the possibility and risk of economic overheating due to the high growth rate of the economy, and stresses that China should implement all measures to reinforce macro-economic controls to cool down the economy.

U.S. Subprime Crisis Has Limited Impact on China Economy

China can still maintain robust economic growth even if the subprime credit crisis slowed down the U.S. economic growth, according to the Deutsche Bank AG.

"China's economic growth rate would be less than one percentage point lower if that of the U.S. slowed down by one percentage point," said Ma Jun, chief economist for Greater China at Deutsche Bank AG in Kong Kong, said on Tuesday.

China's economy can still easily grow more than 10 percent if the U.S. economic growth rate slowed to 0.7 percent in the second half of 2007, Ma noted.

China's economy expanded by 11.5 percent during the Jan.-June period compared with the same period last year.

"The U.S economic downturn also has limited impact on the profitability of the listed firms on China's equity markets as a whole," Ma said, adding it can only seriously affect eight percent of the total stock market capitalization in the country.

"Although another major correction of the U.S. stock markets may prompt the H-shares in Hong Kong to slump in the short term, but the robust corporate profit earnings and sufficient liquidity can help them recover more quickly than any other emerging markets even in case of big correction."

"We don't have big worries that the U.S. subprime credit crisis can affect the Chinese economy greatly as well as its stock markets in the middle term," Ma added.

PetroChina Inks LNG Supply Deal

China's top oil and gas producer has struck a deal with Europe's largest oil company to buy liquefied natural gas (LNG) from Australia, to meet the country's soaring demand for clean fuel.

PetroChina International Co Ltd, a branch of PetroChina, and Shell Eastern LNG signed a long-term supply agreement for LNG from the Gorgon project in Western Australia, Shell said on its website yesterday.

Shell and PetroChina will draw up a detailed LNG sale and purchase agreement by the end of next year, according to Shell's statement.

"Details such as price of delivery are still to be agreed, but the deal will certainly boost China's clean energy supply," said Han Xiaoping, an independent analyst with energy portal China5e.com.

Han said the deal could also give PetroChina scope to get involved in upstream gas exploration and production on the Gorgon project.

"PetroChina could use its established natural gas distribution networks in China to great effect if it can get involved in upstream production at Gorgon," said Han.

Shell's Beijing office was not available for comment yesterday.

However, Jon Chadwick, executive vice president of Shell Gas and Power Asia, said the deal "sets a new benchmark for LNG supplies into China and underlines Shell's commitment to Chinese LNG customers and to the Gorgon project."

Shell will sell one million tons per annum of LNG to PetroChina during the 20-year contract, Shell said.

The Shell-PetroChina agreement is conditional upon a final investment decision from the Gorgon joint venture partners.

China's Chery Auto Starts Selling Cars in Chile

Chery Automobile Co Ltd, China's fourth largest carmaker, said it launched sales operations in Chile on Sept 1 via a local agent, SK Berge.

The carmaker said in a statement that the initial lineup in Chile includes its QQ and Tiggo models, which will later be joined by the QQ6 and A5 cars.

Chery Auto exported 52,712 cars in the first half, almost tripling year-earlier shipments of 13,548 units. Overall sales for the period totaled 190,362 units, compared to 133,200 a year earlier.

China Resources Profit Triples on One-Time Gain, Beer

China Resources Enterprises Ltd., the state-controlled retailer and brewer, said profit almost tripled in the first six months because it sold its Hong Kong gas station unit and sales from beer and retailing gained.

Net income rose to HK$3.74 billion ($480 million), or HK$1.56 a share, from HK$1.27 billion, or 54 Hong Kong cents, the Hong Kong-based company said in a statement to the city's stock exchange Wednesday. Sales rose 11 percent to HK$35.2 billion.

China Resources booked a one-time gain of HK$2.39 billion from the HK$4 billion sale of its Hong Kong petroleum distribution unit to China Petroleum & Chemical Corp. China Resources Snow Breweries Ltd., its venture with SAB Miller Plc, last month agreed to buy stakes in four Chinese breweries for 596 million yuan ($79 million).

"More acquisitions of breweries and supermarkets are expected to boost its market share and support profit growth," Solomon Chuen, a Hong Kong-based analyst at Quam Ltd., said before the figures were announced. "The expansion of other core businesses - retailing, food and brewing - can cover the earnings gap caused by the sale of the oil business."

Oil distribution and the operation of gas stations in Hong Kong, the group's biggest source of revenue and profit in 2006, declined 13 percent in the first half of this year to HK$10.6 billion as the company planned to discontinue the business.

Snow beer

China Resources said beverage division profit gained 55 percent to HK$118 million. It sold 2.37 million kiloliters of its Snow beer, 82 percent more than a year earlier. The brand accounted for more than 70 percent of beverage sales.

"The group will continue to grow its production capacity through acquisitions, investments in greenfield breweries and capacity upgrade of existing breweries," the statement said. It had about 50 breweries in China on June 30, producing 9 million kiloliters a year.

Profit from retailing -- mainly supermarkets and branded fashion -- rose 86 percent to HK$273 million on Chinese consumers' growing wealth. China Resources holds a 51 percent stake in Esprit Holdings Ltd.'s 750-store distribution network in China.

It has benefited from an 18 percent jump in the disposable income of urban Chinese to 7,052 yuan in the first half, according to China's National Bureau of Statistics.

Meat Processing

Food processing and distribution, including meat sourcing, slaughtering and processing, generated a profit of HK$224 million, up 4.7 percent. China Resources said it expects the operating environment to be "challenging" as the price of pork has risen, peaking at a 10-year high in July.

China Resources still has a "favorable position" after unit Ng Fung Hong Ltd. lost its monopoly on supplying live hogs to Hong Kong from the mainland.

"The impact is limited because it also sells meat in other parts of China, such as Shenzhen" in the industrialized south of the country, Quam's Chuen said.

The diversified company is also involved in the textile business and property investment.

The company declared an interim dividend of 15 Hong Kong cents, compared with 14 Hong Kong cents a year ago.

Oil Price Hikes Ruled out

The country's two biggest oil companies have not asked the government to raise prices of their refined products as reported by some media, a senior planning official said yesterday.

"We haven't received any application from Sinopec or China National Petroleum Corp to raise prices of finished oil products in response to rising global crude prices," Bi Jingquan, vice-minister of the National Development and Reform Commission, said.

The two refineries had made profits in the January-July period, he told a press conference in Beijing.

Zhang Zhiguo, a senior media manager with Sinopec, told China Daily yesterday that his company began to lose money in June, but the losses have not yet offset the profits made this year through May.

Analysts said that any hike in refined oil prices would further push up inflation, which has risen largely because of food prices.

Bi said the government will continue to reform the pricing system for oil products.

"China's crude prices have been linked to international markets, and we will reform finished oil product prices based upon that - that is the direction."

Price revisions will take into account international oil prices and affordability of all aspects of society, he said.

The official said the commission had asked the two oil giants to increase production and imports to ensure supply in Fujian and Heilongjiang provinces, which suffered oil shortages last month.

On the whole, the country's oil demand and supply is balanced and the market is stable, he said.

HSBC Expands Focus on Wealthy

HSBC will expand its outlets for affluent clients by at least 50 percent in the second half to capitalize on the booming wealth management business on the Chinese mainland.

HSBC plans to be running more than 45 so-called premier centers by the end of this year, up from the current 30. The services target clients with a daily average balance of at least 500,000 yuan (US$66,050) or the equivalent, HSBC said.

The bank will charge 300 yuan a month for its premier services clients.

The bank is operating its high-end services in 12 Chinese cities, including Beijing, Shanghai and Guangzhou. Almost 50 percent of the premier clients are local residents, HSBC said.

HSBC was among the first four overseas players to launch unlimited retail yuan services to Chinese customers in late April. The others were Citibank, Standard Chartered and the Bank of East Asia.

China is expected to have 8.5 million households with annual incomes of more than US$25,000 by 2015 compared with 2005's 2.9 million households, according to MasterCard.

The Chinese mainland was home to 345,000 people who had a net worth of US$1 million last year, up from 2005's 320,000, according to Capgemini SA.

China Customs Awarded for Anti-counterfeit, Piracy Efforts

The World Customs Organization (WCO) has for the first time awarded China Customs for their contribution in fighting against counterfeit goods and piracy, according to the General Administration of Customs (GAC).

A total of 5,332 companies had filed applications to China Customs for the protection of 11,352 intellectual property rights by the end of August, it stated.

China Customs authorities uncovered more than 8,400 infringement cases valuing more than 1 billion yuan (132.4 million U.S. dollars) from 1995 to the end of March this year.

The number of infringement cases uncovered by China Customs hasbeen growing at an annual rate of around 30 percent since 2000, the GAC said.

In January, 15 Chinese customs officers were awarded by the WCOfor their excellent performance in intellectual property rights protection.

Chery plans dual listing

Chery Automobile Co., Ltd, one of China's leading car manufacturers, is planning a dual listing both on the mainland and Hong Kong stock markets in the next two or three years, according to an industry insider.

The move is to raise funds for the aggressive expansion plans of the Wuhu-based company in East China's Anhui Province. Chery is now undergoing internal financial restructuring to pave the way for the listing.

Experts estimated the company would need to raise a minimum of RMB 10 billion through the dual listing to fuel its expansion plan both home and abroad.

However, Chery needs to wait for the best time to go public as its operating results are not so attractive to investors at the moment. Its operating performance lagged far behind many other industry rivals, such as General Motors's venture with SAIC Motor Co and Honda Motor's tie-up with Guangzhou Automobile Corp.

Recently, Chery inked a deal with Quantum LLC, a U.S.-based firm, to establish a JV with an annual output of 150,000 vehicles and total investment of RMB 5.38 billion. It has also struck a deal with Fiat to manufacture Chery, Fiat and Alfa Romeo cars with an annual output of 175,000 vehicles.

As a leading self-branded car manufacturer in China, Chery plans to boost its capacity to one million units by 2010. Chery also announced that it will build seven more factories overseas before 2010 to further enhance its overseas sales.

Beijing International Swimming Pool SPA Bath Show

Start Date

12-SEP-07

End Date

14-SEP-07

Venue City / State Country China International Exhibition Centre Beijing / Beijing China

Event Profile:

Beijing International Swimming Pool SPA Bath Show is focused on the business side of spa and creating an environment that foster learning and a feeling of community for the well being of industry.

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Visitor's Profile:

Visitors includes travel specialists, medical professionals and health and beauty consultants, operators of facilities looking to buy products and equipment and these visitors consisted of spas, wellness centres, leisure and sports clubs, hotels, medical facilities and health centres, beauty salons and consultants and anti ageing clinics.

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Exhibitor's Profile:

Exhibitors include professionals related to Resorts, Hotels, Spa consultants & Products, Destination Spas, Medical Spas, Day Spas, Club Spas, Spa Equipment, Beauty Professionals, Tourism Board, Travel Organization, Airlines, Tour Operators, Interior Designers etc.

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Organizer: China National SPA Committee Room 2006, No. 62 Building, Ocean Paradise Chaoyang, Beijing, China. Tel: +(86)-(10)-85864985 Fax: +(86)-(10)-85862040

China Emergency Assistance Equipment & Technology Equipment (CIEA Expo)

Start Date

12-SEP-07

End Date

14-SEP-07

Venue City / State Country Beijing International Convention Center Beijing / Beijing China

Event Profile:

China Emergency Assistance Equipment & Technology Equipment (CIEA Expo) will provide a complete range of procurement solutions to distributors, suppliers and traders looking for Fire, Rescue, Police and Emergency Response products.

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Visitor's Profile:

Key government decision-makers, Buyers, importers & manufacturers looking for new products and suppliers, Retailers searching for the hottest products, Businessmen and importers seeking mutually profitable partnerships, Wholesalers & distributors looking to strike deals with manufacturers and exporters, Importers seeking to acquire exclusive distribution rights in Algeria, Media representatives.

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Exhibitor's Profile:

Products and services on display will include: Access Control, Biometrics, CCTV, Systems Integration, Home Systems, Alarms, Smoke Detectors, Communication Equipments, Fire pumps, Rescue Vehicles, Fire Control Tools, Manual & Remote Monitors, Automatic Sprinkler Systems, Deluge Walls & Water Spray Systems, Info Systems, Disaster Management Tools, Fire Vehicles, Breathing Apparatus.

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Organizer: China Enterprises International Exhibitions & Advertising Co. Limited 401-411 Room, Hualian Office Building, No. 48, Zhanlan Guan Road, Xicheng Dist, Beijing, China. Tel: +(86)-(10)-88361766 Fax: +(86)-(10)-88382248

Electronic Circuit & Assembly Expo (ECA Expo)

Start Date

12-SEP-07

End Date

14-SEP-07

Venue City / State Country Guangdong Modern International Exhibition Center Dongguan / Guangdong China

Event Profile:

Electronic Circuit & Assembly Expo (ECA Expo) is a good opportunity for the PCB manufacturers, equipment & materials suppliers and related industry leaders to meet their buyers and explore their business opportunites in the South China region.

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Visitor's Profile:

Independent Power Producers, decision-makers, power utilities companies, Buyers, importers, and manufacturers looking for new products and suppliers, Retailers searching for the hottest products, Businessmen and importers seeking mutually profitable partnerships, Wholesalers and distributors, Importers seeking to acquire exclusive distribution rights in Algeria, Media representatives.

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Exhibitor's Profile:

Profile for exhibit include Electronics Assembly, SMT & Related Equipment and Materials, Electronic Equipment & Components, Electronic Assembly Materials, Insertion Technology, EMS (Electronics Manufacturing Service), Printed Circuit Board, Printed Circuits Boards, Machines & Equipment for PCB, Base Materials & Related Materials for PCB, Chemicals for PCB, Environmental Protection & Recycling.

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Organizer: Paper Communication Exhibition Service Flat 15,5/F,Wah Shing Center 11 Shing Yip Street, Kwun Tong Kln, China (Hong Kong S.A.R.). Tel: +(85)-(2)-27639011 Fax: +(85)-(2)-23410379

China International Tire Expo (CITEXPO 2007)

Start Date

12-SEP-07

End Date

14-SEP-07

Venue City / State Country Shanghai Everbright Convention & Exhibition Center Shanghai / Shanghai China

Event Profile:

China International Tire Expo (CITEXPO 2007) will continue to serve as the best platform for the tire industry's professionals in business trade, brand promotion and information exchange. Since 2003, CITEXPO has been held in the same city in China (Shanghai) and has become one of most popular trade shows in the tire industry on the globe.

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Visitor's Profile:

Professionals related to the field of Tires, Casings, Tubes, Wheels, Rims, Tire Accessories, Equipment for Tire Repairs, Materials, Plants, Equipment, Tools for Tire & Wheel Production, Tire Retreading are the target visitors.

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Exhibitor's Profile:

Profile for exhibit include Run-flat tires; bias and radial tires; green tires; automobiles, aircraft tires, Steel and light metal rims for automobiles, wheel covers, Tire protection chains; lifting devices; puncture protection; wheel aligners, tire inflating devices, tire inflating plants, tire mounting devices, automatic tire mounting machine, tire changing tools, tire regroovers and blades, tire-wheel washing machines, steel wire adhesive.

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Organizer: Reliable International Exhibition Services Co. Limited Rm 1702, Bldg 6, SOHO Tower, 88 Jianguo Road, Chaoyang Distr, Beijing, China. Tel: +(86)-(10)-85898181 Fax: +(86)-(10)-85898180

Furniture China

Start Date

12-SEP-07

End Date

15-SEP-07

Venue City / State Country Shanghai New International Expo Centre Shanghai / Shanghai China

Event Profile:

Furniture China is recognized as the pivotal event for sourcing furniture and bringing innovation to the international markets' increas ingly demanding needs. Asia's leading manufacturers and a range of leading international manufacturers and suppliers use Furniture China as the international launch pad for their latest products, getting into business with the elite of international and local buyers.

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Highlights:

Concurrently with: Office Furniture China, Furnishings, Fabrics & Lightings China, Furniture Manufacturing & Supply China, ZOW China, Kitchen & Cabinet.

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Visitor's Profile:

Architects,Interior Designers / Decorators, Wholesalers, Distributors, Manufacturer, Importers, Exporters of Furniture, Retailers, Agents, Representatives & General Public are the target visitors.

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Exhibitor's Profile:

Profile for exhibit include Bed room, living room, dining room furniture, Kitchen, bathroom furniture, Children's furniture, Outdoor furniture, Bed bases and mattresses, Antique reproduction furniture, Office Furniture, Office, conference, computer desk & chair, Lobby chair/sofa, Filing cabinet, Partition, Office accessories, Furnishings & Home Accessories, Lighting, Fabric, Linen, Carpets and rugs, Curtains, blinds, Handicrafts, Decorative accessories.

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Organizer: Shanghai CMP Sinoexpo International Exhibition Co. Limited 10/F Xian Dai Mansion, 218 Xiang Yang Road (S), Shanghai, China. Tel: +(86)-(21)-64371178 Fax: +(86)-(21)-64370982

Furniture Manufacturing & Supply China (FMC 2007)

Start Date

12-SEP-07

End Date

15-SEP-07

Venue City / State Country Shanghai New International Expo Centre Shanghai / Shanghai China

Event Profile:

Furniture Manufacturing & Supply China (FMC 2007) is a must see event for all furniture and furnishings retailers, interior designers, interior decorators, architects and product specifiers, Furniture Manufacturing & Supply China features more than 500 manufacturers, wholesalers and designers over a huge 35,000 square metres.

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Highlights:

Concurrently with Furniture China, the over 2,000 exhibiting companies in Furniture China are the targeted visitors of Furniture Manufacturing & Supply China, which may offer you an easy and cost effective way to attract more trade visitors. Incorporating ZOW China, the furniture raw materials and supplies section of Furniture Manufacturing & Supply Chinawould be divided into local area and oversea area named as ZOW. In ZOW, only international brand and high standard products are allowed in.

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Visitor's Profile:

Architects, Interior Designers / Decorators, Wholesalers, Distributors, Manufacturer, Importers, Exporters of Furniture, Retailers, Agents, Representatives & General Public are the target visitors.

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Exhibitor's Profile:

Profile for exhibit include Wooden, Metal, Plastic & Glass Furniture Manufacturing, Spring & Sofa Production, Cuttings & Accessories, Dust Collecting Equipment, Drying Equipment, Spraying & Finishing Equipment, Laminating Equipment, Sanding & Polishing Machinery, Surface Treatment & Finishing, Wood Turning Machinery, Furniture Material & Accessories Supply, Wood & Timber, Furniture Decorating Materials, Paints & Abrasives for furniture making, Adhesive.

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Organizer: Shanghai CMP Sinoexpo International Exhibition Co. Limited 10/F Xian Dai Mansion, 218 Xiang Yang Road (S), Shanghai, China. Tel: +(86)-(21)-64371178 Fax: +(86)-(21)-64370982

ZOW-International Furniture Components & Supply Expo (ZOW China)

Start Date

12-SEP-07

End Date

15-SEP-07

Venue City / State Country Shanghai New International Expo Centre Shanghai / Shanghai China

Event Profile:

ZOW - these three letters are inseparable from the furniture suppliers industry. ZOW became synonymous for a new style b2b-event: elegantly furnished, with uniformed exhibition modules, brightly illuminated and transparent exhibition areas with limited space for each exhibitor. Concentration on the essential is the key word.

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Visitor's Profile:

Architects, Interior Designers / Decorators, Wholesalers, Distributors, Manufacturer, Importers, Exporters of Furniture, Retailers, Agents, Representatives & General Public are the target visitors.

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Exhibitor's Profile:

A complete range of new releases by Australian and international manufacturers, wholesalers and designers, including: Bedroom Furniture, Lounge Furniture, Dining Furniture, Outdoor Furniture, Occasional Furniture, Furnishings & Fabrics, Lighting & Lamps, Rugs & Floorcoverings, Artwork & Framing, Objets d'art.

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Organizer: Survey Marketing & Consulting S.L. Oficina de Ferias, Trigo, 54-Area 2, Leganes, Spain. Tel: +(91)-(11)-6933458 Fax: +(91)-(11)-6943096

World Toilet Expo & Forum

Start Date

12-SEP-07

End Date

14-SEP-07

Venue City / State Country Shanghai Science and Technology Museum Shanghai / Shanghai China

Event Profile:

World Toilet Expo & Forum is a series of events created by the World Toilet Organization (WTO) to cater to the specific needs of mature cities. Each of the events addresses issues that will be of particular significance to the host city.

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Highlights:

The first WTE&F took off successfully in Shanghai in May 2005. The three-day event with the theme Gracious Living for a Model City was organised by WTO and the Shanghai City Appearance and Environmental Sanitation Administrative Bureau (SCAESAB).

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Visitor's Profile:

Building & Construction Authorities, Environmental & Public Health Authorities, Policy Makers from various health and environmental ministries, Waste & Management Control Authorities, Construction Companies,Property Management Firms, Building Systems Engineers, Commercial Cleaning Companies, Environmental Institutes & Colleges, World Toilet Organization Members.

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Exhibitor's Profile:

Profile for exhibit include Automated Toilet Systems, Personal Care Products, Peripherals - Hand Dryers, Water Heaters, Toilet Flushing Systems, Toilet Bowls, Wash Basins, Cleaning & Maintenance Services, Pipes, Pumps, Valves & Flow Controls, Water Pipes & Drains, Leak Detection, Cleaning Systems, Pest Control Equipment, Sanitary Equipment & Hygiene Products, Ventilation System, Odour Control Systems, Sewerage / Waste & Water Treatment, Plumbing, Septic Systems.

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Organizer: Meeting Planners International Pte Limited 20, Kallang Avenue, 2nd Floor Pico Creative Centre, Singapore, Singapore. Tel: +(65)-62972822 Fax: +(65)-62962670

Kitchen & Cabinet China

Start Date

12-SEP-07

End Date

15-SEP-07

Venue City / State Country Shanghai New International Expo Centre Shanghai / Shanghai China

Event Profile:

Kitchen & Cabinet China is a public show which will attract the leading lights of the kitchen trade. It attracts a powerful, high spending, decision-making audience. The stunning visual impact of the event brings showroom sparkle to a business-to-business environment and an exclusive series of features & seminars adds a practical, educational dimension.

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Visitor's Profile:

Professionals related to Kitchen electric appliances, Range of stoves, Cooking utensils, Tableware, Kitchen machinery, Kitchen apparatus, Kitchen cabinets, Kitchen cleaning products & General Public are the target visitors.

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Exhibitor's Profile:

Profile for exhibit include Kitchen electric appliances, Range of stoves, Cooking utensils, Tableware, Kitchen machinery, Kitchen apparatus, Kitchen cabinets, Kitchen cleaning products, Kitchen appurtenant works & articles, Kitchen design, Special kitchen utensils, Kitchen condiments.

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Organizer: Shanghai CMP Sinoexpo International Exhibition Co. Limited 10/F Xian Dai Mansion, 218 Xiang Yang Road (S), Shanghai, China. Tel: +(86)-(21)-64371178 Fax: +(86)-(21)-64370982

Office Furniture China

Start Date

12-SEP-07

End Date

15-SEP-07

Venue City / State Country Shanghai New International Expo Centre Shanghai / Shanghai China

Event Profile:

Office Furniture China is recognized as the pivotal event for sourcing furniture and bringing innovation to the international markets' increas ingly demanding needs. Asia's leading manufacturers and a range of leading international manufacturers and suppliers use Furniture China as the international launch pad for their latest products, getting into business with the elite of international and local buyers.

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Highlights:

Concurrent Event: Furniture China, Furnishings, Fabrics & Lightings China, Furniture Manufacturing & Supply China, ZOW Trend & Design, Kitchen & Cabinet.

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Visitor's Profile:

Architects,Interior Designers/Decorators, Wholesalers, Distributors, Manufacturer, Importers, Exporters of Furniture, Retailers, Agents, Representatives & General Public.

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Exhibitor's Profile:

Profile for exhibit include Office desk, chair, pavilion system, conference table, sofa, computer desk, filing cabinet, storage system, Furniture in hotel room, lobby, restaurant, Public seating, desk, bar table, bar chair, seating of cinema/theater/gymnasium, reception desk, Classroom desk, chair, platform, bed, storage cabinet etc.

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Organizer: Shanghai CMP Sinoexpo International Exhibition Co. Limited 10/F Xian Dai Mansion, 218 Xiang Yang Road (S), Shanghai, China. Tel: +(86)-(21)-64371178 Fax: +(86)-(21)-64370982

Automotive Testing Expo China

Start Date

12-SEP-07

End Date

14-SEP-07

Venue City / State Country Shanghai Everbright Convention & Exhibition Center Shanghai / Shanghai China

Event Profile:

Crash Test Expo China, The world's leading trade fair for automotive vehicle and component test, evaluation and quality engineering. Never before has East Asia had a trade show totally focused on the technologies and services involved within automotive testing and quality engineering. Hosted at the perfectly located Shanghai Everbright Convention and Exhibition Centre in the booming commercial center of Xujiahui.

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Highlights:

As such, the marketing campaign, which has already started, will focus on inviting to the event the most senior test and evaluation decision makers, ensuring the highest level of business is achieved. Automotive Testing Expo China 2006 is sure to attract the most senior test and evaluation engineers, technical directors, and R&D managers, from China's entire automotive manufacturing community.

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Visitor's Profile:

Trade Visitors only - manufacturers, importers & exporters of Vehicle accessories, special equipment, tuning, performance systems, design refinement. Repair & Automotive Services - Equipment for vehicle service and repair, bodywork repair and painting, garage building and management, refuelling and care, disposal and recycling.

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Exhibitor's Profile:

Profile for exhibit include Passenger Cars & Commercial Vehicles, Coach & Auto Bodies Builders, Two & Three Wheelers, Tyres, Car Finance, Insurance & Services Alternative Fuel & Fuel Systems, Auto Accessories, Batteries, Oil & Lubricants, Auto Components, Tools, Garage / Service Station Equipment.

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Organizer: UK & International Press Events Abinger House, Church Street, Dorking Surrey, United Kingdom. Tel: +(44)-(1306)-743744 Fax: +(44)-(1306)-742525

China Plastics Exhibition & Conference (China PEC)

Start Date

12-SEP-07

End Date

14-SEP-07

Venue City / State Country Taizhou International Convention & Exhibition Center Taizhou / Jiangsu China

Event Profile:

China Plastics Exhibition & Conference (China PEC) is the home to both China 's largest plastics production base and trading center for plastics raw materials, machines and machine tools.

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Visitor's Profile:

CEO's, Managing Directors, Marketing Manager,Decision & Opinion Makers, General Managers, Area/Regional Managers, Financial Heads, Technical Experts, R&D Specialists Traders, Distributors, Agents, Purchasing Authorities, Heads of Apex Bodies, Diplomatic Missions, Trade Associations, Export Councils, Engineers, Supervisors/Technical Officials, Dealers/Retailers, Manufacturers/Suppliers.

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Exhibitor's Profile:

Raw Materials, Chemicals & Auxiliaries, Plastic Packaging Machinery & Technology, Equipment & Services, Machines and Equipment for Processing Recycling, Machinery and Plant for Processing, Post Processing Machine, Molds and Dies, Ancillary Equipment, Semi-finished Products, Technical Parts and Reinforced Plastics, Plastics Finished Products

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Organizer: SinoPec Corp. No.1,Tengda Rd,Luqiao, Taizhou, China. Tel: +(86)-(576)-2531122 Fax: +(86)-(576)-2531017

Linux World Beijing

Start Date

07-SEP-07

End Date

08-SEP-07

Venue City / State Country The Kerry Center Hotel Beijing / Beijing China

Event Profile:

Linux World Beijing is the world's leading trade show and conference for management and IT professionals, to learn about Linux & open source applications, solutions, ROI and Total Cost of Ownership. It provides the powerful combination of education and vendors.

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Visitor's Profile:

LinuxWorld delivers a focused audience consisting of: Corporate Management, CIOs, CFOs, CEOs, CTOs, IT/IS Professionals, Systems Administrators, Network Managers, Consultants, Data Center Managers, System Engineers, Systems Integrators, Software Engineers, Systems Programmers, Developers.

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Exhibitor's Profile:

Exhibitor include IT managers, C-level executives, developers, system administrators, decision makers and leaders in system integration, financial services, manufacturing, retail, telecommunications.

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Organizer: IDG World Expo 3, Speen Street, Suite 320, Framingham, United States of America. Tel: +(1)-(508)-8796700 Fax: +(1)-(508)-6206668

Policy on natural gas streamlined

CHINA has enacted a new industry policy on natural gas use to address the supply shortage and optimize usage, the nation's planning agency said yesterday.

The guideline says residential gas use is a top priority, while usage in petrochemical plants is discouraged, the National Development and Reform Commission said on its Website.

The policy, described by the NDRC as of "strategic importance," became effective on August 30 after approval by the State Council.

New methanol projects that use gas as a base will be barred. Methanol, which can also be derived from coal or crude oil, is an industrial chemical and a fuel that can be mixed with gasoline and diesel to cut pollution.

The use of natural gas in other petrochemical projects and power-generation plants will also be limited or outlawed. For example, gas-fired power plants will be banned in certain coal-rich regions.

The guideline said urban residential gas use is the most favored option.

"We have to ensure gas will be first used in the residential sector," the planning body said.

"We should consider social benefits, environmental benefits and economic benefits" while deciding where the gas resources should be used first.

The NDRC said gas use should be well planned for better conservation and higher usage.

Existing gas-based petrochemical projects, especially fertilizers, will remain in operation. Those approved and under-construction projects, which have signed long-term gas-purchase contracts, also won't be affected, the NDRC said.

China wants cleaner-burning natural gas to account for 5.3 percent of total primary energy consumption by 2010, up from 2.8 percent in 2005.

But supply may not catch up with the strong demand, typically in booming coastal regions.

Several major gas-transport projects have lately been announced or launched.

Sinopec Corp on Friday started building a 1,702-kilometer pipeline to transmit gas from the Puguang field in Sichuan Province to Shanghai.

China National Petroleum Corp announced early last week the route for a mega cross-country gas pipeline, at more than 7,000 kilometers long, to transport Turkmenistan gas via far northwestern Xinjiang Uygur Autonomous Region to Shanghai in the east and Guangzhou in the south.

IT center of attention for GDS

GLOBAL Data Solutions, Hewlett-Packard and Microsoft have signed agreements to jointly invest more than 800 million yuan (US$106.04 million) to build an information technology infrastructure data center in Chengdu.

It will be the largest of its kind in China, Beijing-based GDS said. The center, to open next month, contains disaster-recovery systems for the transport and finance sectors.

The lost data can be quickly restored with remote information after disasters, similar to the September 11, 2001, terrorist attacks in the United States, according to officials of Chengdu, in the country's southwest.

The High Availability Data Center, in the Chengdu High-Tech Industrial Development Zone, will also include data processing and personal information arrangement services. It is designed to serve banking, securities, insurance and government institutions.

"The center is in construction now and the detailed opening schedule hasn't been finally decided," a marketing official at Beijing GDS said yesterday during a phone interview.

The new center will be put into operation on a limited basis as early as October, and in the initial period it will be used in some transit areas provided by the government.

The construction of the formal service center will begin at that time and be completed in 18 months, according to He Zheng, vice president of GDS, quoted by Chengdu media yesterday. The center will focus on providing disaster-recovery services and will be connected with GDS' disaster-recovery centers in Beijing, Shanghai, Guangzhou and Shenzhen to form a large network.

Companies can rent center space to store their data for back-up, according to GDS.

HP and Microsoft have rich experience in storage-server management and related software in disaster recovery.

As a "Go West" strategy, HP announced on July 31 that it will establish an IT service center with Sichuan-based Yinhai Software, which provides services for neighborhood ISV (independent software vendor).

Investor fears price puzzle in China buys

OAKTREE Capital Management LLC, the firm behind China's biggest buyout, is shunning investment in Chinese companies preparing to go public because prices are too high and there isn't enough time to make proper risk assessments.

Some hedge funds stoke demand for pre-initial public offering assets without doing adequate checks on the targets, Bill Kerins, Hong Kong-based managing director said in a recent interview.

"There are so many companies that are trying to price private deals based on what some investment banker is telling them next year's public market price is likely to be," said Kerins. "Now, you're given an extremely limited time to do due diligence."

China has been Asia's biggest market for pre-IPO financing as companies seek funds to boost capital and bolster their accounts before going public. Price expectations from the sellers have gone up after the Shanghai composite stock index gained 95 percent this year. Chinese companies raised US$18 billion from selling first-time shares overseas this year, data compiled by Bloomberg News show. Los Angeles-based Oaktree bought a 0.5-percent stake in Bank of China Ltd, the nation's second-biggest bank, as its first pre-IPO investment in China last year. Oaktree also bought the dry-bulk shipping business from China National Cereals Oils & Foodstuffs Corp, the nation's largest grain trader, for about US$400 million in 2004. That remains the biggest buyout in China.

Sinopec weathers losses on crude

CHINA Petroleum & Chemical Corp, Asia's biggest refiner, may extend losses from processing oil unless the cost for a barrel falls below US$64, two company officials said.

Domestic fuel prices have been kept below global levels by the Chinese government, causing refining losses for China Petroleum, one of the officials told Bloomberg News in Shanghai, asking not to be identified because of company policy.

Sinopec, as China Petroleum is known, has recorded losses since July, after making profits in the first half, as crude prices soared to records in August.

China controls prices of diesel and gasoline to curb their impact on inflation, which climbed 5.6 percent in July, the highest in more than 10 years.

"Sinopec will continuously be pressured by crude costs as it's unlikely the government will raise fuel prices in the short term, given the nation's inflation rate," Zhang Guojun, an oil analyst with Pingan Securities Co, said by phone yesterday.

Benchmark oil prices in New York gained 10.4 percent in June and 11 percent in July. Prices have eased six percent since hitting a record of US$78.77 a barrel on August 1.

Crude for October delivery rose by 0.24 percent to US$74.23 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 2:53pm Beijing time yesterday.

The stronger yuan has helped domestic oil refiners offset higher crude costs. The Chinese currency has advanced 3.5 percent against the US dollar this year amid speculation the government will tolerate further appreciation because of gains in the domestic stock market and the nation's strong economy.

The appreciation of the yuan and higher prices for naphtha and chemicals, raw materials for plastic carrier bags to synthetic fibers, have helped to increase the breakeven point for the refining business from US$60 a barrel last year, said a second company official.

PetroChina Co, the nation's largest oil company, can make a profit from refining with crude at US$65 a barrel, Zhang Hong, deputy chief economist of PetroChina Refinery & Marketing Co, said on June 30.

Sinopec is "working" to get a government subsidy for selling fuels below international prices, President Wang Tianpu said last week. The company received a one-off five-billion-yuan subsidy at the end of last year to help cover raw material costs.

Big-ticket refineries to ensure oil supply

CHINA is planning a major expansion of its oil refineries to help reduce reliance on imports and keep up with demand, a state-run newspaper has reported.

Plans call for the country to have 31 refineries by 2015, each with a capacity to process 10 million tons of crude oil a year, or 220,000 barrels a day, the Economic Observer said over the weekend.

At the end of last year China had only nine facilities with similar capacity.

The National Development and Reform Commission also expects by 2015 to have 30 ethylene factories, each with an annual output of a million tons a year, the report said, citing unnamed officials.

China Petrochemical Corp, or Sinopec, is planning about 20 refineries able to process 10 million tons of crude oil a year, it said. Some would be new but most would involve less costly expansions of refineries.

PetroChina, China's biggest oil conglomerate, is expected to build at least 10 refineries of the same size, the report said.

Sinopec, Asia's largest refiner by capacity, and other refiners have struggled with losses from refining as crude oil prices have soared in the past two years.

But the expansion plan reflects China's long-term agenda for meeting soaring demand and building up its chemicals sector.

Haier Wins Computer Purchase Deal From Macedonia

Local media reports that Haier has signed a contract with Macedonia's Education Department to sell 100,000 computers, worth about EU$24 million, to the country.

The 100,000 computers will be used in 164 middle and primary schools across Macedonia.

Gao Yicheng, director of Haier Group's Computer Department, says this is the largest deal that Haier has ever signed with a European country. And the significance of this contract lies in that it not only helps Haier seize the computer market of Macedonia, but also places it in a new development direction in the Balkan region.

Since March, 2007, Macedonia has been inviting bids for this computer deal. A total of 20 companies have reportedly purchased the bidding books and seven of them participated in the bidding, Except for Haier, all of the others are reportedly from Europe.

Haier Group aims to sell 1.6 million computers this year, including 400,000 to be exported from China.

RedPrairie Expands China Presence

RedPrairie has expanded its operations in China and opened bigger offices in Shanghai.

Dr Ziping Zhang, who leads the Shanghai team, comments, "With RedPrairie's sales, service and development teams now totalling 88 people we needed more space to accommodate us all in one facility. Our new office houses the whole team on a single floor and has state of the art facilities for serving our prestigious clients."

Mark Skipper, managing director, RedPrairie Asia-Pacific, says, "With our E2eTM suite of integrated supply chain and retail solutions RedPrairie is positioned to thrive in China. Having proved consistently that we can deliver on time and on budget, we are unique among Chinese and Western companies in our space."

July retail sales value up 14.2 pct in HK

Hong Kong's total retail sales value rose by 14.2 percent to 21.3 billion HK dollars (2.74 billion U.S. dollars) in July compared with that of the same period last year, Hong Kong Census and Statistics Department said on Monday.

The total retail sales volume also rose 12.1 percent, which reflects the upbeat consumer sentiment on the back of robust economic fundamentals, rising wages and an improving labor market.The booming stock market and continued rise in visitors also helped.

Rising labor income and further expansion of inbound tourism should remain the favorable factors supporting the retail business, the department said.

Analyzed by type of retail outlet, the sales volume of motor vehicles and parts increased the most, by 55.9 percent from a year earlier. This was followed by sales of electrical goods and photographic equipment; jewelry, watches and clocks, and valuable gifts; footwear, allied products and other clothing accessories.

The total retail sales in the first seven months in 2007 grew 10 percent in value or 7.9 percent in volume over the same period a year earlier. The total retail sales volume grew 5.9 percent in the quarter ending July compared with the preceding three-month period, according to statistics from the department.

Dragonair to join oneworld alliance

Dragonair announced in Hong Kong on Monday that it will become a member of oneworld, one of the world's three aviation alliances, on November 1 this year.

The company also vowed to offer the alliance's full range of services and benefits to its customers and at the same time greatly enhancing oneworld's coverage in the Chinese mainland.

"Becoming a member of oneworld is an exciting development for Dragonair and is the latest benefit to result from our becoming part of the Cathay Pacific Group," said Chief Executive Officer of Dragonair Kenny Tang.

"We are pleased that oneworld customers will be able to connect through Hong Kong to our extensive network of destinations in the Chinese mainland and to the increasing number of business and leisure destinations we serve in the region," he added.

Oneworld Managing Partner John McCulloch said that the addition of Dragonair means that oneworld will maintain its lead in China. "With our combination of Dragonair, Cathay Pacific and the award-winning Hong Kong hub, it means that oneworld will offer the best quality airline service for travel to or from the whole of China," he said.

Twelve of Dragonair's Chinese mainland destinations are Changsha, Chengdu, Chongqing, Fuzhou, Guilin, Haikou, Kunming, Nanjing, Ningbo, Sanya, Shenyang and Wuhan, which will take the number of Chinese mainland destinations served by the oneworld network to 22.

With Dragonair's joining oneworld, the alliance's network will cover more than 700 destinations in almost 150 countries and areas.

Dragonair's sister airline Cathay Pacific is one of the founding members of the 10 oneworld alliance. The members include American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, LAN, Qantas, Japan Airlines, Malev Hungarian Airlines and Royal Jordanian Airlines. Around 20 other carriers are affiliate members.

Oneworld is the only alliance to enable passengers to fly throughout its network on any combination of carriers using electronic tickets.

Coal sector drives indices up to new high

Inspiring performance in the coal sector and the absence of negative news over the weekend drove major stock indexes well above the 5,300-point level on Monday despite the bourse's warnings against excessive speculations.

The benchmark Shanghai Composite Index opened at 5257.78 points, nearly 40 points higher than last weekend's close. It wasn't long before the index conquered another landmark, 5,300 points, around 10 am. After touching a new all-time high of 5,327.54 after the noon break, the index lingered a bit lower absorbing huge encashment pressure after the surge. It wrapped up Monday's trading at 5,321.06 points, 1.96 percent higher than last Friday's close. Market turnover rose to 191 billion yuan (US$25.3 billion).

The Shenzhen Component Index, covering major stocks listed in the smaller Shenzhen market, gained 1.63 percent to close at 18,164.04 points with a turnover of 107 billion yuan. It also claimed a record high in the middle of trading.

Doubtlessly, the coal sector led today's gain admiring sound half-year profit reports and enlarged productivity. As a convincing proof, China's top economic planning agency announced yesterday the nation's coal production jumped 11.7 percent year-on-year to 1.278 billion tons in the first seven months of 2007. Almost all stocks in the sector attained notable gains of over nine percent today, while share prices of Shanxi Coking and Hengyuan Coal Industry and Electricity Power both reached the upper limit of ten percent.

Shares of China Eastern Airlines, the nation's third largest carrier, resumed trading today after announcing a deal to sell a combined 24 percent stake to Singapore Airlines and Temasek Holdings, the Singaporean government's investment arm. Its share price decisively clinched the upper limit of 10 percent for one day.

After a month-long correction, China State Shipbuilding Co Ltd, the most expensive stock in the domestic securities market, sailed back to the 200-yuan field due to rosy industry predictions. The stock closed at 205.59 yuan, its maximum rise for one day.

In addition, shares in the steel making and public utility sectors contributed generously to today's success. Shares of the Xinjiang based Bayi Iron & Steel increased by 10 percent to close at 14.42 yuan, while Changchun Gas Co Ltd, a municipal gas supplier in Jilin Province, also impressed investors with a seven percent growth.

To prevent excessive speculations in the volatile market, the Shenzhen Stock Exchange recently established a risk management committee and issued guidelines for managing transactions calling on entrusted dealers to refuse or suspend liabilities to clients who use securities accounts illegally or pursue illegal transactions. Dealers are also responsible for educating investors, and warning them about various investment risks, according to the bourse.

Now it's up to Chinese stock investors to decide whether to share the growth or to risk their positions in sheer stock speculations. At the historic height of the market, a sober mind and more cautiousness seem to be indispensable to all.

SAT, oil price adjustment, fuel tax unlikely in tandem

China will not introduce a fuel tax and adjust oil prices at the same time, said Cong Ming, director of the Tax Policy and Legislation Department of the State Administration of Taxation (SAT), at the Oil Circulation Industry Development Summit Forum 2007, held in Beijing on September 1, according to today's Shanghai Securities News.

"Collecting fuel tax and adjusting oil prices are two different things, and they will not be introduced in tandem with one another," said Cong.

A recent report said the National Development and Reform Commission, China's top economic planner, is preparing for another round of domestic oil price adjustments pressed by oil giants such as China National Petroleum Corporation and China Petroleum & Chemical Corporation, and the anticipated fuel tax will be launched together with those adjustments.

"The fuel tax reform in China is in urgency, but the tax will be launched at a proper time," said Cong.

Meanwhile, Cong said the impact on oil circulation enterprises will be limited.

It will not increase enterprises' burden although oil prices may rise after highway maintenance fees are abolished at the time of the fuel tax launch, because highway maintenance fees are shared by consumers, explained Cong.

Cong said the resource tax reform should be faster in comparison, adding the collection method will be based on prices instead of quality, in a bid to adjust product profit and industry structures.

The resources tax reform will also have few impacts on oil distribution enterprises, said Cong, explaining that enterprise profit will not be lowered because the increased tax burden will be offset by oil prices.

Push to foreigners in agri wholesale

Lower returns compared with the retail and supermarket sectors has made wholesale less enticing for overseas investors. To date, the Ministry of Commerce has received only one overseas investment application.

Assistant Minister of Commerce Huang Hai said China encourages foreign investors in the booming wholesale sector, adding that overseas involvement could help raise standards to an international level.

"China's wholesale market has been fully opened to foreign investors, but it has become less attractive because of low returns," Huang told China Daily yesterday at the 25th Congress of the World Union of Wholesale Markets, a three-day event being held in Beijing.

He confirmed that his ministry had accepted one overseas application to set up a wholesale market in China, but didn't name the applicant.

Donald Darnall, chairman of the US-based World Union of Wholesale Markets, said Huang's comments were "encouraging news" for wholesalers attending the event.

Darnall said foreign investors could form partnerships with the government or local companies, bringing with them practices that ensure high-level hygiene and food safety in the marketplace.

Huang said China needs international experience and best practices to track food quality along the whole "farm-to-table" process. Its fledgling agricultural wholesale market, which has had only 20 years to develop, is less advanced in terms of technology and management in some cities.

However, Huang said the government has attached great importance to improving supply chain management, information and "green" techniques.

China has 4,370 wholesale markets nationwide, at which 70 percent of agricultural product trade happens.

"It will take the wholesale markets in big cities such as Beijing and Shanghai three to five years to meet advanced international standards," said Huang. "And those in less developed regions will take a much longer time."

Sompong Nimchuar, minister-counselor of the Thai Embassy in China, said China's plan to expand wholesale markets and attract foreign investment has brought more opportunities to Thai investors and farmers.

He said China will import 37 types of fresh fruit and processed products from Thailand during the 2008 Beijing Olympic Games.

Natural Gas Deposit Found in South China Sea

The Russian-Vietnamese joint venture Vietgazprom has discovered a natural gas deposit on the continental shelf of Vietnam. After five years of unsuccessfully searches and an estimated investment of $50 million, Gazprom will be able to produce at least 10 billion cu. m. of gas to sell in Vietnam and China.

Gazprom's development strategy includes completing full chains, from production to sales, in areas outside Russia, on the continental shelves of Venezuela, Vietnam, India and in the Caspian Sea. Gazprom and Petrovietnam signed an agreement in September of 2000 for the 25-year exploration of Block 112 of the Vietnamese continental shelf. The deposit was discovered in Block 113, however. Gazprom received the right to explore that block in 2005. The second test well it drilled there yielded "an industrial flow of natural gas."

The gas flow from the well amounts to up to 400,000 cu. m. per day. Gas condensate has also been detected in the flow. Spokesmen of Zarubezhneftegaz, which represents Gazprom's interests in Vietnam, said that the discovery of the deposit marks the end of the first of the three phases of the geological exploration project, adding that the deposit contains predicted reserves of 300 billion cu. m., but that number would probably grow.

Shougang to develop iron ore mine in Hubei

Shougang Resource Holding Co. Ltd., a Shoudu Iron and Steel Group (Shougang) subsidiary company, recently inked an agreement with Hubei Province's Changyang county government for the two-phase development of a local iron ore mine, a local government official told Interfax today.

Titan Petrochemicals moves into shipbuilding

Titan Petrochemicals Group has completed the acquisition of a shipyard from its controlling shareholder as it continues its quest to reduce exposure to the volatile oil shipment business and become an integrated oil logistics provider.

The transaction, which was first flagged in late March, was priced at a significant valuation discount to other Chinese shipyards based on the current order book and expected future earnings, which suggests the injection should be very favourable to Titan.

Part of the shipyard project "C" including the high-margin ship repair facility -is still at the development stage, however, which means the acquisition is not without risks. Acknowledging these risks, the payment has been structured to account for the fact that a lot of the earnings potential is based on what comes on stream in 2008-2010.

Hong Kong-listed Titan is paying a total of $170 million for 100% of the Titan Quanzhou Shipyard, which is located in Fujian province. $57 million of the total will be paid in cash, while the remaining $113 million will be settled through the issuance of new shares to the seller, Titan chairman and controlling shareholder Tsoi Tin Chun.

About one quarter of the shares, or $28.6 million worth, will be issued in the form of preferred shares that will be converted into ordinary shares subject to a three-year earn-out arrangement. The implication of this is that the shipyard must post pretax earnings of at least $7.5 million in 2008, $20 million in 2009, and $50 million in 2010 for Tsoi to get his final shares. If these thresholds are met, Tsoi's stake in Titan will increase to 60.9% from 50.8% prior to this deal.

The acquisition, which is subject to independent shareholder approval, is expected to be completed in October.

Quanzhou Shipyard, which started operations in 2006 and launched its first ship last month, has an order book of 22 vessels with a combined order value of $210 million, which should ensure the earnings targets are met. On top of this, the ship repair and offshore engineering portions of the yard, which are both still under construction, are expected to be fully operational by the end of 2009.

When completed, the yard will have an annual shipbuilding capacity of 26 tankers, a repair capacity of up to 250 vessels per year as well as offshore engineering capabilities such as the building of oil platforms. The company told investors at a presentation yesterday that the transaction is expected to be earnings per share accretive from 2009 onwards.

Based on the earn-out targets and the $170 million acquisition price, Titan would have paid the equivalent of 22.7 times 2008 earnings, 8.5 times 2009 earnings and 3.4 times the expected earnings for 2010. This compares with a other Chinese shipyards that trade at forward PE multiples of 25-40 times.

"We believe now is the right time to bring Titan Quanzhou Shipyard into the group's business portfolio. The yard is developing very rapidly and its design features will allow it to benefit from the favourable and robust market environment," Titan's chief executive, Barry Cheung, said in a written statement.

Titan has been gradually been moving away from its original business of transporting oil on very large crude carriers (VLCC) over the past few years and have been putting more focus on other parts of its business, including its oil storage facilities. The shipyard acquisition will reduce the Ebitda contribution from the VLCC business, which still has eight carriers in operation, to only 19% in 2010 from about 55% this year and 85% in 2004. The shipyard business is projected to account for 36% of Ebitda by 2010.

In this sense the transaction will be a transformational event for the company. It also shows that this is different from the typical asset injection from a Chinese parent to its Hong Kong-listed vehicle that the market has grown used to when it comes to the telecom operators or the power generators since those typically involves more of the same types of assets that the listco already owns.

Merrill Lynch advised Titan on the acquisition and CIMB-GK has been appointed as an independent financial adviser to the independent board committee.

Titan's oil storage business in China got the nod from Warburg Pincus earlier this year when the private equity firm bought a 49.9% stake in this business for $100 million. The two-part deal, which was engineered to give Titan a much needed cash infusion, also saw Warburg Pincus inject $75 million directly into the listed company in return for a 9.9% equity stake as well as preference shares and warrants that could increase its holdings to 22%.

In July, Warburg Pincus sold its ordinary shares, however, and is now invested in the company solely through its convertible preference shares. After this transaction Warburg Pincus will hold 10.9% of Titan on a fully diluted basis if it converts all its shares and warrants, a statement to the stock exchange shows.

Meanwhile, Titan also released its first half earnings yesterday, which showed a 19% rise in revenues from the year earlier period to HK$7.69 billion ($985 million). Net profit rose 132% to HK$152 million.

Domestic Politics behind US, Mexico's WTO Subsidies Probe

The efforts by the United States and Mexico to push for investigations by the World Trade Organization into China's alleged subsidizing of industrial exports are motivated by domestic political aims, the Chinese Ministry of Commerce said on Monday.

The two countries had lodged the lawsuit with huge misunderstandings of China's related policies, said the MOC spokesman.

On Friday, the WTO set up an expert panel to probe whether or not China was illegally subsidizing its industrial exports as alleged by the United States and Mexico.

The United States first filed the case to the WTO in February and later was joined by Mexico. The two countries complained that China was using tax breaks and other incentives to subsidize its exports in violation of the WTO regulations.

"Their actions are motivated by domestic politics. They attempt to mix up the self improvement in China's tax laws and egulations with the fruits of the WTO's dispute settlement mechanism," said the spokesman.

"China will not change its way of self perfecting tax laws and regulations in accordance with the demands of its social and economic development," he said.

The United States and Mexico have also turned a blind eye to the progress made and actual conditions of China's economic system reforms, he claimed. "Some of the subsidies in their lawsuit have already been scrapped, and China's policies will also be in line with the WTO regulations after the Enterprise Income Tax Law comes into effect."

The Enterprise Income Tax Law will be effective on Jan. 1, 2008.

The United States and Mexico have consistently made the requests for a WTO probe without acknowledging the progress made in consultations with China on March 20 and June 22 and China's sincere and constructive attitude, the spokesman added.

China Cosco to Buy Largest Dry-Bulk Fleet on Trade

China Cosco Holdings Co. will buy the world's largest fleet of dry-bulk ships from its parent for 34.6 billion yuan ($4.6 billion) because of China's rising imports of iron ore and other raw materials.

The shipping line will buy 412 vessels, it said in a statement to Hong Kong's stock exchange today. China Cosco will sell 864.3 million Shanghai-listed A-shares to its parent for 16 billion yuan to help pay for the purchase. The shares will be sold at 18.49 yuan each, or 15 percent less than the closing price on July 25, before the stock was suspended.

Dry-bulk shipping rates have doubled during the past year fueled by China's surging imports of iron ore and other raw materials. China Cosco raised 15.1 billion yuan in a Shanghai share sale in June to buy ships and a stake in a logistic company from its parent.

"The dry-bulk market will remain strong for the remainder of this year and into next year," said Jack Xu, an analyst at SinoPac Securities. "Shipyards are pretty busy right now and their order books are full, so we don't expect any significant increase in capacity at least for this year."
Share Sale

China Cosco, Asia's largest container shipping line, will also seek government approval to sell as many as 432.7 million new A shares to as many as 10 institutional investors, it said, without identifying the potential buyers. The share sale would be worth 9.39 billion yuan, based on the closing price of the company's Shanghai-traded stock yesterday. It will also borrow money and use internal resources to pay for the ships.

The dry-bulk ships have a combined capacity of 32.02 million deadweight tons, China Cosco, a unit of China Ocean Shipping (Group) Co., said in the statement. The vessels are either owned by units being bought by China Cosco, based in the eastern city of Tianjin, or are on long-term charters. The units also have another 46 vessels on order, according to the statement.

China Cosco's Hong Kong-listed shares were suspended this morning and will resume trading this afternoon at 2:30 p.m. They have more than quadrupled this year, climbing 4.4 percent to HK$19.02 yesterday.

The Baltic Dry Index, a measure of chartering rates for different sized vessels, gained 1.1 percent yesterday to a record 7,783.

China Mobile Pakistan Unit Signs Contract with ZTE

ZTE Corp said it has signed a GSM network contract with Pakistan telecom firm CMPak, a unit of China Mobile.

ZTE, China's largest provider of telecommunications equipment and network solutions, said the order includes the construction of 14,000 carriers for a radio network and 10 mln lines for a core network.

According to the agreement, ZTE will provide its next-generation V3 base stations, and the core network will adopt all-IP networking.

CMPak was formerly known as Paktel prior to its acquisition by China Mobile in 2007.

The project marks the first overseas tieup between ZTE and China Mobile.

'The partnership of two Chinese telecom providers collaborating overseas demonstrates the rapid development of China's telecom sector and the benefits it can deliver around the globe,' said Wang Qiqiang, president of ZTE South Asia.

Financial details of the deal were not provided.

Shell Pleased With Pricing On China LNG Deal

Royal Dutch Shell PLC said Tuesday it was pleased with the price it has struck in its agreement to sell liquified natural gas from the Gorgon field in Western Australia to PetroChina Co. (PTR).

"It is a strong LNG market at the moment," said Jon Chadwick, executive vice- president of Shell Gas and Power Asia.

Chadwick told reporters in Perth that Shell was "pleased with the price" set in its deal with PetroChina.

Earlier Tuesday, Shell signed an agreement with PetroChina for the sale of one million metric tons of LNG a year from Gorgon, subject to the project's approval by Shell and its joint venture partners Chevron Corp. and ExxonMobil Corp.

Airbus Sees China A380 Orders of 130 Units over 20 Years

Airbus sees China orders of 130 superjumbo A380s over the next 20 years, the South China Morning Post reported, citing John Leahy, an Airbus chief operating officer.

'Over the next year, we will see incremental orders from China for the A380,' Leahy said, as China seeks larger-volume planes to ease congestion at its airports.

China to Restructure Telecommunications Industry

China's supervisor of state-owned assets has planned to launch restructuring of the telecommunications sector in the fourth quarter of this year and finish the reform in March 2008, the latest issue of Caijing Magazine reported.

Caijing, one of China's most influential financial publications, said the State-owned Assets Supervision and Administration Commission (SASAC), which has been mulling over the reform since 2004, has formulated a restructuring plan, but it is not finalized yet and needs approval from higher levels.

Currently China has four major players in the telecommunications sector, namely China Mobile, China Unicom, China Telecommunications and China Netcom. The sharp differences among their operational results have fused the restructuring.

According to their half-year reports, China Mobile recorded a net profit of 37.9 billion yuan (4.99 billion U.S. dollars); while that of China Unicom, 5.65 billion yuan; China Telecommunications, 13.48 billion yuan; and China Netcom, 6.713 billion yuan.

A telecommunications expert said that the SASAC has hoped that the major operators can solve the restructuring problems through talks among themselves, but it did not go very well.

"Directed by the government while handling in line with market rules will be the main pattern of the restructuring," he said.

Chen Jinqiao, deputy chief engineer of the Telecommunications Research Institute under the Ministry of Information Industry, said the major target of the upcoming restructuring is to "realize a harmonized development of the telecommunications market," after which the competitors will narrow their differences in asset scales.

Whichever way the restructuring goes, the report says, the key influence on the development of the industry is still monopolizing the position of State-owned capital, for private and foreign capital, entering China's domestic telecommunications operational market is still "a mission impossible".

Registered Ship Gross Tonnage Tops 35 Million in HK

Cargo throughput at Hong Kong port has been rising in the past decade, with gross tonnage of ships registered in the city now topping 35 million, an official said on Monday.

Speaking at the Tokyo Memorandum of Understanding (MOU) Port State Control Committee 17th meeting in Hong Kong, Director of Marine Roger Tupper said Hong Kong will continue to take an active role in port state control and in activities of the Tokyo MOU.

"Since the set up of the Tokyo MOU, fruitful results on port state control have been achieved through the effective co-operation of our member authorities. Over the past 12 years the number of inspections of Tokyo MOU has more than doubled from 8, 834 to 21,686 vessels and the detention rate has dropped from 5.93 percent to 5.40 percent," he said.

During the past decade the global maritime industry has been operating under a very favorable business environment and large numbers of new ships have been built to meet this market in recent years. The situation is forecast to continue in the next few years based on yard orders.

"In Hong Kong, the cargo throughput of our port continues to increase and the gross tonnage of ships registered in Hong Kong has now topped 35 million. While having benefited from the growth of the industry, our work and duties towards the industry are also on the increase," Tupper said.

"On the ratification of new international conventions, our local legislation to give effect to International Convention for the Prevention of Pollution from Ships Annex VI is expected to be completed by the end of this year. Also we are vigorously carrying out all the necessary preparation work for the ratification of the Maritime Labor Convention in order that we would be ready for its entering into force in a few years' time," he added.

Lonza's small scale plant to come up in China

Lonza, one of the key suppliers to the pharmaceutical, healthcare and life science industries is expanding its China initiatives by setting up a small scale plant which will come on stream in September 2007.

This facility, which operates under cGMP conditions, is designed to accommodate a greater number of reactors including a dedicated and technologically advanced Quality Control lab capable to fulfill the ever increasing requirements of global regulatory authorities on the highest possible level.

In the completed first build-out phase, six smaller reactors including distillation and filtration units are installed, capable of handling a broad range of technologies. The configuration ensures fast change over, optimized efficiencies and extremely rapid technical transfer to commercial assets. Additional capacity can be added without impacting running operations.

The plant is designed for production of quantities from 10 kg up to several hundreds of kg, and closes the gap between Nansha's kilo lab and commercial production assets to allow complete life-cycle support for pharmaceutical products out of China. The commercial scale API facility in Nansha is currently under construction and will house up to 200m3 reactor volume.

In April of 2006, Lonza unveiled a significant investment plan to substantially develop its Nansha Guangzhou, China operations towards the construction of an integrated Exclusive Synthesis platform with R&D capabilities as well as small and large scale cGMP manufacturing.

Australian Trade Minister: Chinese products "safe"

Australian Trade Minister Warren Truss said here Tuesday that Chinese products and food are safe, and Australia treats them exactly the same as products coming from any other country in the world.

"To me they must be safe, otherwise they won't be allowed into Australian market," Truss said in an exclusive interview with Xinhua on the sidelines of the ongoing Asia-Pacific Economic Cooperation (APEC) leaders week in Sydney.

"When we come to Chinese products coming into Australia, we treat them exactly the same as products coming from any country in the world," he said, adding "these products and foods coming into Australia have to meet the same standards as Australian products and foods that are supplied to Australian consumers, and the same as Japanese foods and products supplied to our consumers."

Truss stressed Australia does not have "any particular, special kind of restrictions done for Chinese products that are not done on other countries."

The minister said China is a very important trading partner of Australia, and soon China will be Australia's No. 1 export market. 　

"We prize our trade relations with China very highly, and that's why we'd like to have a free trade agreement with China to underpin that trade and help build cross-border contacts," he said. 　

Statistics shows that in 2006, trade between China and Australia amounted to 32.9 billion U.S. dollars, up 20 percent from the previous year. China is currently the second largest trading partner of Australia while Australia is China's ninth.

In the first six months of 2007, bilateral trade reached 19.5 billion dollars, a 35 percent increase over the corresponding period of 2006.

On Monday, Chinese President Hu Jintao started a state visit to Australia, which is expected to further boost bilateral relations including trade.

Motorola's cumulative investment in China exceeds $3.6 bln

Leading mobile phone maker has cumulatively invested 3.6 billion U.S. dollars in China since its entry into the country in 1987, a company source said.

The accumulative sales volume of Motorola (China) Electronics Ltd established in Tianjin in 1992, has reached 58.1 billion U.S. dollars, according to Ruey Bin Kao, president of Motorola China.

Motorola China's export value totals 41.7 billion U.S dollars.

Motorola set up its office in Beijing in 1987. Currently, its cell phone output in China accounts for 34 percent of the company's total worldwide.

Newly opened mutual fund accounts top 5 mln in August

Retail investors have opened more mutual fund accounts to rake in more earnings from China's robust stock markets.

According to China Securities Clearing Co., Ltd., newly opened mutual fund accounts numbered 5.12 million in August, six times that in July.

Out of the 23 trading days in August, 18 saw the opening of more than 100,000 fund accounts, with a daily record of 600,000 accounts, sources with the clearing company said.

Interim reports of the mutual funds showed that individual investors accounted for 88.5 percent of total fund holdings, up 14 percentage points from the first half of last year, whereas the institutional investors' share decreased from 25.49 percent to 11.5 percent.

Earlier reports said in the first half of this year, Chinese bourses in Shanghai and Shenzhen raised 188 billion yuan (24.9 billion U.S. dollars), with a daily turnover of 202.7 billion yuan, up 440 percent year-on-year.

Fuel tax and resource tax to neutrally affect oil companies

"Fuel tax and resource tax will not pose too much negative influence on oil companies, since most of their new burdens would be transferred to customers," said Cong Ming, director of Regulation and Policy Department of the State Administration of Taxation to Xinhua-run Shanghai Securities News.

"Implementation of fuel tax will transfer toll fees to fuel prices, which will naturally drive up oil products price, but oil companies will not be negatively influenced," said Cong Ming.

Oil companies would not make themselves lose profit either upon implementation of resources tax that would be levied on volume rather than on price, because they would pass their new burdens to end-users, believed Cong.

Cong also pointed out that fuel tax was different from oil pricing system reform and they would not come out simultaneously.

"Fuel tax is more urgent to China and financial and taxation departments are accelerating fuel tax plan," said Cong.

Shell and PetroChina sign Gorgon deal

Shell said today it had signed a heads of agreement with PetroChina for the supply of liquefied natural gas from the Gorgon project in Western Australia.

Shell said it would sell 1 million tonnes of LNG per annum to PetroChina under the 20-year contract.

The two companies will work to conclude a detailed LNG sales and purchase agreement before December next year, it said.

Chevron holds a 50% stake in the Gorgon project while ExxonMobil and Shell each have a 25% stake.

Sinopec, MOL in talks on upstream cooperation

China's Sinopec Corp and Hungarian oil and gas firm MOL are in talks on cooperating in exploration and production activities, MOL Communications Director Szabolcs I. Ferencz said on Tuesday.

Ferencz declined to say where the two firms could work jointly or when an announcement could be made and said several options were under discussion.

"All I can confirm at this point is that there are discussions about upstream cooperation in a third country, meaning not in China or Hungary," Ferencz told Reuters.

Hungarian national news agency MTI reported late on Monday that MOL Chief Executive Gyorgy Mosonyi, who is in Beijing with the delegation of Prime Minister Ferenc Gyurcsany, held top level talks with Sinopec on specific cooperation proposals.

MTI added that Gyurcsany, along with Finance Minister Janos Veres and Economy Minister Janos Koka also attended the talks.

MOL is currently involved in exploration projects in Russia, Pakistan and Kazakhstan, among others, and said it was seeking news upstream projects, primarily in the former Soviet Union and the Middle East. ADVERTISEMENT

MOL has been seeking upstream assets for a long time, and more recently has been fighting off an approach by Austria's OMV.

China National Coal's August output rises to record

China National Coal Group, the country's second-biggest supplier of the fuel by sales, said production rose to a record 10.07 million metric tons in August because of surging domestic demand.

Output reached 69.7 million tons in the first eight months, Beijing-based China National Coal said in a statement on the Web site of the State-owned Assets Supervision and Administration Commission. It didn't give comparative figures.

China uses coal to generate about 78 percent of the electricity produced in the world's fastest-growing major economy. The nation increased coal output 8.1 percent to 2.33 billion tons last year and aims to produce 2.6 billion tons by 2010.

"The record output will help the company meet the full-year target of 100 million tons,'' the state-owned coal producer said in its statement, posted Monday.

China National Coal's production rose 26 percent to 90.62 million tons in 2006, it said in January.

First-quarter output reached 24.63 million tons, while output of coke used by steelmakers surged 34 percent to 1.17 million tons, it said in April.

China Coal Energy Co., China National Coal's Hong Kong- listed unit, raised HK$1.7 billion ($218 million) in an initial share sale in December. Shenhua Group Corp. is the country's largest producer by sales.

Steel price upswing in Sept.

Steel price is expected to follow an upward curve in September, driven up by surging demand for steel in construction.

Steel market has seen more transactions since August, and the recent contractual steel price appeared to be remarkably higher than the forward price, further driving up the spot price of steel products.

Besides, the output of such construction steel as deformed steel bar and spiral-welded pipe may enter into a heyday in the second half of this year, signaling that demand may be spurred.

But steel plants have to bear pressures from the rising cost and the upcoming concentrated production. Though Baosteel has cut prices of some of its steel prices in the fourth quarter of this year with hot-rolled plate and galvanized steel coil respectively down 200-300 yuan/ton and cold rolling products even down 500 yuan/ton, it would not impact the upswinging steel price in the short period.

Wine-tasting events are welcome by Chongqing people

Wine-tasting events held by wine clubs are welcome in Chongqing. It offers chances for wine lovers to go together to taste wines and communicate.

At the wine-tasting events, people can taste different varieties of wines and compare them. Wine lovers at different ages and from every walk of life hold a wine-tasting event with a topic of wine every month. Besides tasting wines, they can also learn wine knowledge. In addition, they pay attention to the development of international wine sectors, French wine festivals and so on. And each person is requested to pay 50-100 yuan for the fees.

It's said that more and more young people like to meet each other at wine-tasting events. The principal of Chongqing wine club said that more than 300 wine lovers registered to be the members of wine clubs in one year. It's a new way for young people to meet and communicate with each other.

Ministry endorses food purity, export quality

SUN Zhengcai, the state agriculture minister, yesterday reassured consumers concerned about toxins in their food.

His message came as China launched a new program requiring all packaged food for export to have a quality guarantee label.

The quality of Chinese agricultural products is higher than ever before, Sun said in a statement on the ministry's Website.

Most produce is passing with flying colors.

For example, the average acceptance rate regarding pesticide residues in vegetables was 93.6 percent in the first half of 2007; those regarding clenbuterol hydrochloride contamination and sulfa drug residues in livestock products were 98.8 percent and 99.0 percent respectively, Sun said.

More than 99 percent of Chinese food exports to the United States, the European Union and Japan met quality standards over the last four years.

"Most Chinese farm products are safe and consumers don't need to worry when eating them," he said.

China will clamp down on food tainted with illegal or excessive chemicals.

From now on food packaged for export will not be allowed to leave the country if the product does not have an inspection and quarantine symbol, said the General Administration of Quality Supervision, Inspection, and Quarantine in a separate announcement.

The new measures, which became effective on Saturday as part of a broader plan to improve quality standards, cover seafood, eggs, rice, vegetables, oil, wine and biscuits.

"The aim is to effectively curb illegal exports of food, protect the interests of legal export enterprises, strengthen consumers' confidence in the quality and safety of food made in China, and help trace and recall products that have problems," the supervisory agency said in a statement posted on its Website.

The agency also issued a notice yesterday for fruit exporters to participate in a registration system to ensure quality and safety.

Inspection and quarantine work will be strengthened.

Last Friday China put into effect its first recall system for unsafe food products, which will require manufacturers to stop production and sales, notify vendors and customers and report to authorities when product defects are found.

JF Asset Sees Further 10% Gain in China Shares

Mainland Chinese companies traded in Hong Kong are likely to rise a further 10 percent by year-end, buoyed by rising profits and China's booming growth, JF Asset Management's top China fund manager said on Tuesday.

While there is a risk of a near-term correction, it is more likely that the market will enter a consolidation phase before climbing to new highs, said Howard Wang, head of the firm's Greater China team.

"When you look at the broad picture, number one, this is one of the few places in the world in which the question is, 'How much economic growth do you want?' Most places in the world, as we know, are struggling with growth and credit conditions," he told the Reuters China Century Summit in Hong Kong.

"Almost uniformly, (Chinese) companies have either been pre-announcing earnings surprises, or reporting earnings surprises on the upside, so from a corporate standpoint, I think we're in pretty good shape."

He said an additional 10 percent gain was likely for the China Enterprises index of H-shares and the MSCI China index, which have both risen more than 40 percent so far this year.

The benchmark Shanghai benchmark stock index, which has doubled in value so far this year, is likely to rise even more than 10 percent before year-end as long as the government is comfortable with the fundamentals of the market, he added.

Wang is co-manager of the $744.6 million JF Greater China fund.

The fund returned 28.4 percent in the first seven months of the year, beating its benchmark, the MSCI Golden Dragon index, which returned 21 percent with dividends reinvested over the same period.

The largest holdings in the fund at the end of June included China Mobile, Taiwan Semiconductor Manufacturing Co Ltd, Hon Hai Precision Industry Co Ltd and China Life Insurance Co.

Hong Kong-based JF Asset, which manages about $36 billion, is part of the fund management arm of JPMorgan Chase & Co. JPMorgan Asset Management had $1.1 trillion in assets under management at the end of June.

Ernst & Young to Expand China Staff and Offices

Global accounting firm Ernst & Young said on Tuesday it plans a nearly four-fold jump in its China staff in the next decade, to about 30,000 from 8,000 now, as it courts Chinese clients eager to expand outside the world's fastest growing major economy.

The firm, one of the world's "Big Four" auditing firms, also plans to open two to three new branches annually over the next few years, focusing expansion in western China to support Beijing's "Go West" economic policy, its visiting chief executive, James Turley, said in Shanghai, China's financial hub.

"This is all people business and the biggest risk for us is if we don't get the right kind of people for our company," he said during the Reuters China Century Summit.

"We need to have a firm in China in the next foreseeable future, you know, 10-plus years, and we are not talking about 8,000 or 9,000, we are talking about 25,000, 28,000 or even 30,000 staff in China," he said.

London-based Ernst & Young last year became the official auditor for the listing of Industrial and Commercial Bank of China (ICBC), which was the world's biggest initial public offering of shares in 2006.

Besides ICBC, China's top bank by assets, many Chinese clients of Ernst & Young are big state-owned enterprises such as China Mobile, the country's biggest mobile operator which bought control of Paktel Ltd., Pakistan's oldest cellphone carrier early this year.

"China is always the destination for foreign investments, and now we are seeing much more interest in Chinese firms looking abroad," said Turley, who joined the company in 1977 after graduating from university.

"Now, the Chinese companies know they can compete in the global stage," he said, adding that such moves will create many business opportunities for Ernst & Young in the near future.

Ernst & Young, which operates 10 offices across China currently, took over a local accounting firm in 2001, making it the first foreign player in the industry to make such an acquisition in China.

Electronics to Improve Exported Toy Quality

China has adopted an electronic system to improve product quality supervision of exported food and toys, a top quality supervision bureau official said today in Shanghai.

China will establish an enterprise and product credit system to better track and regulate product quality. Meanwhile, consumers can easily ask for detailed information about products through phone, Internet and special machines, according to Pu Changcheng, vice minister of China's General Administration of Quality Supervision, Inspection and Quarantine.

Chinese firms are rated on for four levels from A to D based on their product quality record. The top-rated firms will enjoy favorable policies such as tax breaks, easier access to bank loans and less hassle at customs. The worst-rated companies will be gradually wiped out of the market, according to Pu.

"The firms with bad ratings needn't worry if they have really improved quality control as we will adjust the rating after regular inspection," Pu told Shanghai Daily on the sidelines of a local forum today.

"Those companies that purposely put poisonous or harmful products on the market - less than one percent of total firms - will have a bad rating and be tracked forever in the system," Pu said.
Totally 23,675 firms in China were recorded in the credit system by the end of last month, according to the administration.

China is increasingly faced with international concern over the quality of its exports, especially toys and food.

A batch of made-in-China toys were found with paint containing lead, which may link to health problems in children including brain damage. Mattel's Fisher-Price unit, the US-based buyer, recalled nearly one million toys in the US market last month. The recall caused the manager of the Chinese supplier to commit suicide.

"It is an accident and most exported Chinese products are qualified," said Pu. "China's quality inspection standard is much more severe than most developed countries."

"If the US really wants to reduce the safety threat that consumers are facing, it would be more constructive to identify its own loopholes in foreign trade supervision and try to close them - rather than simply pointing its fingers at China," Mei said in its column in Shanghai Daily recently.

China 2007 Steel Output to Rise by 58 Mln Tons

Total steel output in China is expected to rise by 58 mln tons from 2006 to 480 mln this year, said Li Shijun, secretary-general of the China Iron and Steel Association (CISA).

Li told a conference in Shanghai that in the first half, the country's crude steel production totaled 237.58 mln tons, up 18.92 pct year-on-year.

Separately, the general manager of Baosteel's stainless steel unit Liu An also told the meeting that stainless steel production capacity is significantly outpacing consumption.

'China's annual stainless steel consumption is projected to rise to nine mln tons by 2010 from 5.3 mln in 2006, while the country's total capacity of the product was around 13 mln tons last year.'

Foreign Brands Enjoy 70% Share of China's Cellphone Market

Foreign brands continue to dominate the Chinese mobile phone market with a market share of more than 70 percent in the first half of 2007, according to the latest report by CCID Consulting.
The report said that in the first half of this year China produced 248 million mobile phones. Foreign brands occupied the first four places, with Nokia enjoying a market share of 30.9 percent, followed by Motorola, Samsung and Sony Ericsson with 22.5percent, 9.6 percent and 7.7 percent respectively.

The ZTE, Huawei and Bird are the top three domestic brands, with market shares of 4.8 percent, 3.2 percent and 2.3 percent, respectively, the report said.

CCID predicted that China's output of mobile phones will exceed 500 million this year and that the development of 3G, double module and customized mobile phones will offer great opportunities to mobile phone manufacturers.
China's mobile communications market has been growing rapidly in recent years. The latest statistics show that the number of subscribers to mobile communications had hit 480 million by the end of the first quarter, and is expected to exceed 500 million bythe end of the year.

China to Produce Liquid Bio-fuel with Non-food Crops

China will continue to develop liquid biological fuel under the precondition of ensuring food security, Chen Deming, deputy head of the National Development and Reform Commission, said here on Tuesday.

China will discontinue to use maize but turn to non-food crops,such as sweet sorghum, to produce liquid bio-fuel, including ethanol and bio-diesel, Chen said. Most of such non-food crops grow in salina and barren hills and land, which are not suitable for growing grain crops, he said.

Chen said, it is a common practice in the world to produce bio-ethanol with maize. The United States annually produces 15 million tons of bio-ethanol with the crop. Thus the country has increased maize output but decreased land sown to soybean. "In view of the acreage of China's farm land, such a process is not suitable for the country,"Chen said.

There are on the Chinese mainland four facilities annually producing 1.02 million tons of bio-ethanol with long-preserved grain, which have become unedible, Chen said.

The official said, China has approximately 100 million hectaresof salina and barren land that is suitable for growing non-food crops to be used for fuel production.

Competition Welcomed But Not Monopoly

China finally has an anti-monopoly law of its own. The country's top legislature has passed legislation that prohibits certain monopolies.

REPORTER:
An anti-monopoly law is usually regarded as a nation's economic constitution. It serves to protect fair competition, prevent monopolistic behavior and maintain a regulated market place.

China's top legislator Wu Bangguo says the long-awaited law will benefit the country's economic development.

"Based on actual conditions in China, Chinese lawmakers have absorbed the experience of other international anti-monopoly laws to match the economic development in China."

The new law requires notification by all companies seeking mergers or acquisitions, if the actions meet the standard set by the State Council.

Local or overseas companies with more than 50 percent of China's market share for any product can be investigated to see if they are abusing their dominant positions

Hu Kangsheng, a senior official with the National People's Congress Standing Committee, says the law is not aimed at curbing the expansion of big enterprises.

"The anti-monopoly law should initiate from the practical economic conditions in China. It encourages the growth of domestic enterprises through legal merger and acquisition in developing economy of scale and improving the industrial centralization level and competitiveness."

And when a foreign company intends to merge or acquire a Chinese firm, it's also required to go through national security checks in addition to anti-monopoly checks.

"There have been increasing problems concerning foreign mergers and acquisitions in China lately, which has aroused great concerns from varied parties in society."

According to a report carried by Xinhua News Agency, the number of foreign mergers and acquisitions only accounted for 5 percent of all forms of foreign direct investments in China before 2004. The figure increased to 11 percent in 2004 and to almost 20 percent in 2005.

Foreign firms have begun to acquire major state-owned enterprises or companies with famous brands.

Such cases as US private equity firm Carlyle's bid for China's largest construction equipment maker, Xugong, have triggered concerns about national economic security. The deal is still under scrutiny from authorities.

"I don't think such rules will prevent foreign mergers and acquisitions in the country."

Dr. Yuan Dujuan is a law expert at Shanghai University.

In the United States, criticism from US Congress forced Chinese petroleum producer, CNOOC, to give up a more than 18 billion dollar takeover bid for the California-based oil company, Unocal, in 2005. US lawmakers said the deal could jeopardize its national security.

And after a Dubai state-owned company failed to purchase operations at six U.S. ports early last year, US Congress took up legislation to strengthen reviews of foreign investments.

Shang Ming is head of the regulations and decrees division of the Ministry of Commerce.

"National security checks are common practices conducted in many countries (when there are market entries and investment conducted by foreign companies)."

China's newly adopted anti-monopoly law also bans companies colluding to raise prices.

Huang Jianchu, chief of the national legislature's economic law section, explains the rules on price manipulation that involves trade associations.

"If a trade association initiates any joint price hikes in an industry, it will be fined no more than 500,000 yuan, or roughly 65,000 US dollars."

The stipulation is highlighted in light of the recent colluded price increases in certain industries.

The China chapter of the International Ramen Manufacturers Association and some instant noodle makers were found to have jointly conspired in raising prices amid price hikes for food and raw materials.

As the country doesn't have an antitrust law in place, China's top economic planner, the National Development and Reform Commission, recently issued an order requiring instant-noodle makers to take back the so-called 'illegal' price hikes.

"Those whose offences are serious may have their certificates revoked under the new law."

Late last year, the State Council released a list of strategic sectors in which the State would retain control. It includes military-related manufacturing, power production, telecommunication, aviation, shipping and manufacturing of grids and petroleum.

Though these sectors still hold monopolistic positions, they are prohibited by the new law from using such status to curb competition, fix prices, enforce package sales, and refuse or enforce trade.

The law, which began to be drafted 13 years ago, will come into effect next August.

Dalian Prepared for "Summer Davos"

China's northeastern coastal city of Dalian is making itself ready to play host to more than 1,700 participants in the Inaugural Annual Meeting of the New Champions,also dubbed as "Summer Davos".

Convened by the World Economic Forum, the meeting is scheduled to open here on Thursday. Different from the forum's annual meeting at the Swiss winter resort of Davos, the meeting at Dalianis focused on newly emerging businesses and nations.

Dalian in Liaoning Province is a major port, industrial, trade and tourism city. "Hosting the forum will bring the city more chances to open itself up. It is also an excellent opportunity forlocal companies to emerge as global players," said Xia Deren, mayor of Dalian.

"We hope Dalian will be better known to people around the worldamid and after the meeting," he said, adding that the city has been fully prepared for the meeting.

Local police have sent speed boats to patrol the areas close tothe major venue, and are tightening security ahead of the visit ofhigh-ranking officials including Chinese Premier Wen Jiabao.

Ten leading hotels in the city have been tightly booked for theevent. Shangri-La Hotel's local managers said they have invited chefs from Jordan, Italy, Japan and Singapore to cater to the different tastes of guests. Newspapers of different languages are also sent to the hotel rooms.

The city, with a downtown population of more than two million and about 500,000 vehicles, introduces traffic restriction from Sept. 4 to 8, allowing cars with odd or even numbered plates to hit the road on alternative dates. However, taxis, buses and special vehicles are free to run.

During the meeting, 395 sponsored cars and 57 buses will be in service for the participants.

Government officials, entrepreneurs and specialists will discuss a wide range of issues such as changing global business environment, China's economic development and cooperation between traditional and new actors.

In the past two decades, Dalian has been one of the fastest growing cities in China. In 2006, it registered a total GDP of 256.9 billion yuan (about 34 billion U.S. dollars), up 16.5 percent over 2005. It received about 700,000 visitors from overseas last year, according to statistics on the city's official Web site.

69 investment contracts signed in China Software Expo

The Third China (Nanjing) International Software Products Expo closed yesterday with 69 investment contracts signed. Foreign investments reached US$ 820 million, contributing greatly to the total investments worth of RMB 8.77 billion (US$1.16 billion). The number of major project contracts rose by 43.75% and total investment increased by 51.81% compared with the figures last year.

The expo was visited by 324 enterprises from over 30 countries. Among all the 69 major projects, 55 projects are to establish research centers or branches in Nanjing. Fujitsu Taiwan will establish its software base in Nanjing to attract 30,000 software developers. CDC Software will input US$2.2 million to build its largest research center in Nanjing.

The third China Software Expo was held in Nanjing from Sep.1 to Sep. 3. As a well-known education base in China, Nanjing intends to boost its software industry. The annual expo will help the city to achieve its target to "build important software base in China and China's famous software city".

China Unicom plans to set foot in HK 3G market

China Unicom<600050><762> is keen on obtaining Hong Kong's 3G license with plans to venture into the local telecoms market. This bid was made following calls from the Hong Kong communications authority for a fifth 3G license provider of CDMA2000 services.

The Hong Kong authority has set the license reserve priced at HK$76 million. With more than half of its international CDMA subscribers frequenting Hong Kong and having been rewarded the CDMA 3G license in Macau last year, China Unicom proves to be a worthy candidate for the bid.

In an effort to entice Hong Kong operators into a joint bidding, China Unicom had halved the outsourcing equipment costs and offered at least HK$30 million a year for roaming fee income. The company has since expressed interest in cooperating with Hutchinson, Wharf T&T and Chengdian Group.

Established in 1994, China Unicom has been a service provider for GSM and CDMA mobile networks, with 111 million and 39 million subscribers respectively as of May this year. Interim results for the first half of the year reported a 5.1% increment from the same period last year at RMB 49.17 billion.

CILPS 2007 - China International Luxury Property Show

Start Date

07-SEP-07

End Date

09-SEP-07

Venue City / State Country Shanghai International Convention Center Shanghai / Shanghai China

Event Profile:

CILPS 2007 - China International Luxury Property Show will showcase the latest trends in the international luxury real estate market, including luxury waterfront developments, villas, time-share properties and hotel apartments located in holiday resorts. In addition, it encompasses investment promotion such as bank finance, property funds and shared properties, and affiliated services provided by interior designers, architects and other property consultants.

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Highlights:

CILPS 2007 - China International Luxury Property Show gala is a spectacular evening in a sumptuous atmosphere that will bring the privileged CILPS exhibitors together with the local social elite for an extraordinary enjoyment as well as luxury property experience. Exhibitors are encouraged to hold various promotions during CILPS for instance, press conferences, seminars, cocktail party etc., which are the very efficient and direct way to promote their company as well as the projects.

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Visitor's Profile:

CILPS will attract a great deal of national and international attention. The target audience comprises identified consumers in the high-end luxury segment, the rich and famous, CEOs, entrepreneurs, the business and cultural elite, all looking for outstanding properties for sale in the Asia-Pacific region and in the most attractive real estate markets worldwide.

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Exhibitor's Profile:

Exhibitors include Luxury Agents and Brokers, Property Funds, Apartments & Penthouses, Property and Facility Managers, Banks & Financial Institutions, Luxury Estates Developers, Condominiums, Resort & Island Properties, Financial Advisors, Resort/Residence Managers, Hotel & Resort Owners, Tax Specialists, Housing Systems Developers, Time-share Units, Interior Designers, Town Houses, Castles, Villas & Villa Developments, Waterfront & Luxury Developments, Property Investors.

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Organizer: Shanghai Yubo Exhibition International Co. Limited Rm 2215 POS Plaza, No. 1600 Century Avenue, Pudong, Shanghai, China. Tel: +(86)-(21)-51342588 Fax: +(86)-(21)-51342515

China International Solar-Energy & Photovoltaic Application Exposition (SPE)

Start Date

06-SEP-07

End Date

09-SEP-07

Venue City / State Country Shenzhen Convention & Exhibition Center Shenzhen/Guangdong China

Event Profile:

China International Solar-Energy & Photovoltaic Application Exposition (SPE) is the largest business-to-business solar event. This event has been growing rapidly each year.

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Visitor's Profile:

The profile for the visitors: CEO's, Policy Makers, Engineers & Consultants, Project Developers, Regulatory Bodies, Technical Managers, Safety Managers, R & D Personnel.

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Exhibitor's Profile:

The exhibitor profile includes conventional, non conventional, renewable and clean and green energy, power transmission, distribution and conservation systems, process automation and instrumentation, boilers and steam systems, material handling systems, waste management systems, environment monitoring, petrochemical & electrical engineering etc.

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Organizer: Shenzhen Herong Exhibition Industrial Co. Limited Room A-302, Honghao Garden, Xiangmei North Road Futian District, Shenzhen, China. Tel: +(86)-(755)-83536014 Fax: +(86)-(755)-83636011

China International Optoelectronic Exposition (CIOE 2007)

Start Date

06-SEP-07

End Date

09-SEP-07

Venue City / State Country Shenzhen Convention & Exhibition Center Shenzhen / Guangdong China

Event Profile:

CIOE will be sure to provide all exhibitors with world-class services of mature and successful experience. CIOE will continue to lead the latest pulse and innovations of optoelectronic industry and focus on the most advanced technologies and products. We believe that at the critical time of international optoelectronic exhibitors and purchasers, you will definitely grasp the changing information of optoelectronic market and have fruitful achievements.

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Visitor's Profile:

China International Optoelectronic Exposition will have the attendance presence of: Specialized Retailers, Not Specialized Retailers, Electronic Boutiques, Cataloge Selling Companies, Internet Selling Companies, Corporative Buyers, Government Buyers, OEM, Technology,Integrations and Specificators, Content Builders, Area Analists and Professionals, Area and General Press, Public in General.

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Exhibitor's Profile:

Profile for exhibit include Adhesives & dispensers, Test and Measurement Equipment and Services, Electronic components vision inspection equipment, Infrared test equipments, Electronics Manufacturing Services, Contract manufacturing, Electro-mechanical assemblies services, Electronics Components and Metal stamping equipment, Measuring instruments, Component materials, Integrated electronic equipment and components, Electric vehicle systems.

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Organizer: Shenzhen Herong Exhibition Industrial Co. Limited Room A-302, Honghao Garden, Xiangmei North Road Futian District, Shenzhen, China. Tel: +(86)-(755)-83536014 Fax: +(86)-(755)-83636011

China International Water Congress & Exhibition (CIWCE 2007)

Start Date

05-SEP-07

End Date

07-SEP-07

Venue City / State Country Baiyun International Convention Center Guangzhou/Guangdong China

Event Profile:

China International Water Congress & Exhibition (CIWCE 2007) is an extremely widespread and deep level professional activity concerning water treatment technology. This is a grand meeting than following the 5th IWA Beijing world water congress and exhibition, objective on impels cities tap water security, promoting water circulation use and impulse profession technology progress.

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Visitor's Profile:

Water supply utilities, Wastewater treatment plants, Water treatment engineering companies, science and research institute, university, design institute Industry Users: oil refining, petrol-chemical, pharmaceutical, Textile Printing, paper making, food and beverages, metallurgical and electrical industries, Suppliers and distributors of water and wastewater technology and equipment.

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Exhibitor's Profile:

Profile for exhibit include Water disposing technology and equipment, Membrane & membrane separating technology and equipment, Water supply & drainage technology and equipment, Drinking water technology and equipment.

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Organizer: Beijing Shi Bo Hong Ye Exhibition Service Co. Limited Room. 2-15-1C, Ta Yuan Diplomatic Agent Office No. 14, Liangma River South Road, Chaoyang District, Beijing, China. Tel: +(86)-(10)-65327238/85323286 Fax: +(86)-(10)-85323276

China International Pharmacy Raw Materials & Intermedia Exhibition (CPHE 2007)

Start Date

05-SEP-07

End Date

07-SEP-07

Venue City / State Country China International Exhibition Centre Beijing / Beijing China

Event Profile:

China International Pharmacy Raw Materials & Intermedia Exhibition (CPHE 2007) is appointed to be held in Beijing. With its advantageous location, careful plan and organization, high quality service and perfect organizing solution for special visitors, CPHE has been chosen by more and more raw material pharmaceutical companies choose as their primary platform for extending international market.

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Visitor's Profile:

CEOs & Top executives from Pharma Manufacturing Industry, Executives from Production, Quality Control, R&amp;amp;D & Purchase Departments, Professionals from R&D Institutions, Pharmacists from Trade & Profession, Biotechnology Specialists, Top officials from Regulatory Agencies of Central & State Governments, Pharma consultants, Academicians from Medical & Pharmacy Colleges.

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Exhibitor's Profile:

Profile for exhibit include Plant & Equipment for Pharma Production, Packaging Machinery & Materials, Lab Equipment, Analytical Instruments, Labware, Process Control & Instrumentation, Effluent Treatment and Waste Management Systems, Refrigeration, Cold Rooms, Clean Rooms, Bulk Drugs, Drug Intermediates, Excipients, Additives, Technical Books & Journals.

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Organizer: China Pharmaceutical Technology Organization B-2-804 Room No.1 Building Wudongdalou No. 9, Yard Chegongzhuang Street, Beijing, China. Tel: +(86)-(10)-88395100/88395101

3rd NEAsia Investment and Trade Expo opens in Changchun

The third Northeast Asia Investment and Trade Expo opened yesterday in Changchun, the capital of Jilin Province in Northeast China. The Expo will be held from Sep. 2 to 6.

The theme of the Expo is opportunity, exchange, cooperation and development. Over 50,000 investors and merchants from 61 countries and regions will attend the Expo.

Under the nation's scheme to revitalize the old industrial bases in Northeast and other areas of China, the Expo aims at facilitating the regional development and building a cooperation platform between China and other northeast Asia countries.

The Expo is jointly sponsored by the Chinese Ministry of Commerce (MOC), the Office of the Leading Group of Revitalizing the Old Industrial Base in Northeast China under the State Council, and the Jilin provincial government.

A series of activities will be held during the Expo, including a summit forum on investment and cooperation.

Last year more than 40,000 investors and merchants from 54 countries and regions attended the annual expo, which achieved a foreign trade value of US$348 million.

Chinalco boosts copper and titanium exploration

Aluminum Corp of China (Chinalco)<601600><2600>, the nation's biggest aluminum and alumina producer, will seek any opportunities to expand into other mineral markets, including copper and titanium.

RMB 30 billion has been invested to expand copper exploration, and the company is negotiating mineral development projects with Russia, Mongolia, Indonesia and Fiji, said the sources.

Chinalco will take a 49% stake in Yunnan Copper Group to boost its output of the metal. It has also purchased US$ 860 million worth of shares of Peru Copper. The two acquisitions are supposed to raise the company's total copper reserve to about 20 million tons.

Moreover, Chinalco has signed a framework agreement with the UK's Aricom PLC to set up a titanium sponge joint venture. With an estimated investment of RMB 2.2 billion, the plant will have a production capacity of 15,000 tons at phase 1 and is expected to raise the capacity to 30,000 tons after the completion of phase 2.

Chinalco's first-half sales increased by 36.2% from the previous year and its net profit was up by 10.8%, supported by a series of takeovers.

Manufacturing industry output soars 31.71% in 1H

China machinery industry keeps monthly increase of 18% for 53 months, according to the China Machinery Association. The value-added industrial output for the first six months is RMB 731.4 billion, up 33.82% compared with the same period last year. The total industrial output created rose by 31.71%.

China's machinery industry has been converting from the old OEM model to its own brands by importing foreign new technologies. Some equipments are even more advanced than imported. They have made great achievement in researching, developing and localizing advanced technologies.

Meanwhile, the country is also paying growing attention to the development and manufacture of high-end low-energy-consuming equipments in order to save energy and reduce emission.

Since 2003, China machinery products enlarged its proportion in export. Wang Hong, section chief of China Machinery association, said that china's machinery market and competitiveness are enhanced as its machinery trade changed from US$39 billion of trade deficit in 2003 to a surplus of US$9.7 billion in the first half 2007.

Sino-Russia trade volume may exceed US$40 bln

The bilateral trade between China and Russia may exceed US$40 billion this year, following last year's record of US$33.4 billion, Wei Jianguo, Chinese Vice Minister of Commerce, told the sources.

In the opening ceremony of the third Northeast Asia Investment and Trade Expo in Changchun (capital of Jilin Province), Wei Jianguo said the bilateral trade has kept increasing since 1999 at an average annual growth rate of 28.6%. In the first seven months of this year, the trade between China and Russia climbed to US$25 billion.

The border trade between the two countries hit US$7 billion last year, and reached US$4.6 billion in the first seven months of this year, according to the official statistics.

China now becomes the third largest trading partner of Russia, and Russia ranks eight among the largest trading partners in China.

Manufacturing accelerates

CHINA'S manufacturing activity expanded at a faster pace in August than it did in July, according to a survey of purchasing managers released on Saturday.

The Purchasing Managers' Index rose to 54, from 53.3 in July, the China Federation of Logistics and Purchasing and the National Bureau of Statistics said in a statement.

The acceleration, the first in four months, comes as China tries to cool the export-driven economy after the fastest expansion in more than 12 years, Bloomberg News reported. Money flooding in from record trade surpluses threatens to fuel asset bubbles, spiraling inflation and overcapacity in manufacturing.

"The cause may be seasonal because factories normally reduce production in June and July and resume full capacity after the summer," said Zhu Baoliang, chief economist at the State Information Center in Beijing.

Saturday's release was a surprise because the data are usually distributed on the first working day of each month.

The world's fourth-biggest economy grew 11.9 percent from a year earlier in the second quarter. The central bank raised interest rates on August 22 for the fourth time since March. It also curbed export-tax rebates to cool growth in overseas sales.

The economy won't keep heating up, the government statement quoted analyst Zhang Liqun as saying.

The purchasing price index increased to 63 from 58.9, the biggest gain of the August measures. That reflects a "prolonged shortage" of metal raw materials and increased food costs, according to Zhu.

The output index rose to 57.1 in August from 55.7 in July, while the index of new orders climbed to 56.3 from 56, the government said. The index of export orders increased to 55.2, the highest level in three months, from 53.5.

China-Russia trade expects to surpass 40 billion dollars this year

Trade between China and Russia is expected to surpass 40 billion U.S. dollars this year, after it reached a record high of 33.4 billion dollars last year, Chinese Vice Minister of Commerce Wei Jianguo said here on Sunday.

"The two-way trade has kept increasing since 1999, with an average annual growth of 28.6 percent," Wei told an opening ceremony of the 3rd Northeast Asia Investment and Trade Expo opened on Sunday in Changchun, capital of northeast China's Jilin Province.

The China-Russia trade had reached 25 billion dollars in the first seven months, he said.

"Meanwhile, the border trade has become an important part of the bilateral trade," he said.

Statistics show that the border trade between the two countries stood at 7 billion dollars last year and reached 4.6 billion during the Jan.-July period this year.

Currently, China is Russia's third largest trading partner, while Russia is China's eight largest trading partner.

The expo, with the theme of "opportunity, exchange, cooperation and development", attracted more than 50,000 investors and merchants from 61 countries and regions.

China's coal, gas output record double-digit growth

China's coal production jumped 11.7 percent to 1.278 billion tons in the first seven months of 2007 from a year earlier, according to the nation's top economic planning agency.

The coal output rose 12.7 percent year-on-year, or 2.9 percentage points higher from June, to hit 196 million tons in July, the National Development and Reform Commission (NDRC) announced.

During the first seven months this year, the imports of coal soared 49.6 percent year-on-year to 30.96 million tons, while the exports declined 21.2 percent to 28.86 million tons.

Meanwhile, China's output of natural gas climbed 17.1 percent to 38.6 billion cubic meters in the first seven months.

The crude oil production in China, however, rose only 1.1 percent year-on-year to 108.69 million tons between January and July, according to the NDRC.

The output of crude oil slumped 1.7 percent in July from the same month last year.

China, the world's second-largest oil consumer, imported 96.37 million tons of crude oil in the first seven months, up 14.8 percent from a year earlier.

Tobacco ban lauded

A complete ban on tobacco promotion will reduce the harm it does and protect public health, says an editorial in Workers' Daily. The following is an excerpt:

China, the world's largest tobacco producer and consumer, will ban all forms of tobacco promotion by Jan. 2011. This ban has been decided as China's effort to fulfill its commitment to the World Health Organization's Framework Convention on Tobacco Control.

The harm tobacco causes is receiving increasing public attention. Statistics show that 66 percent of all male Chinese above 15 are smokers. Of the 1.1 billion smokers around the world, 350 million are Chinese.

To contain the damage tobacco causes to public health, efforts must be made to reduce the population of smokers. A ban on tobacco advertising is a key part of it.

Such a ban has actually been in place since 1996, but firms have managed to sidestep the rules and promote their brands in other more subtle ways such as sponsoring sporting events, or using their logos without mentioning "cigarettes" on television, radio and in newspapers and magazines.

That tobacco promotion has continued to exist under such guises is primarily because some local governments choose to continue to benefit from tobacco taxes. Driven by high profits and intensive competition in the industry, tobacco companies also use advertising as a vehicle to gain market share.

Some publishing companies cannot resist revenues from such advertisements and help tobacco companies find ways to circumvent the ban. This practice has directly stymied efforts in tobacco control.

A complete ban on tobacco promotion will not only help China fulfill its international commitment, but also protect public health.

Customs step up action on IPR breaches

Shenzhen Customs dealt with 213 cases of infringement of intellectual property rights in the first six months of this year.

The figure represents a year-on-year increase of 112 percent.

A wide range of goods, including handbags, garments, watches, mobile phones, shoes, cosmetics, food, and electronic products, were involved. The estimated value was 15 million yuan, (US$2 million) up 38 percent from a year ago, according to the customs.

"We have put much emphasis on protecting IPR, especially those of domestic brands that have entered the international market," Wang Tianwei, a public relations officer of Shenzhen Customs, said.

While it provided more training to improve the capabilities of law enforcement officials, Shenzhen Customs also launched campaigns to increase IPR awareness among companies.

A total of 12 cases which violated the IPR of Chinese companies were detected in the six-month period compared to seven for the whole of last year.

Closer co-operation with the police had also helped in the fight, Wang said.

The customs had provided three tip-offs to police during the period leading to the arrest of several people.

"Co-operation with the police has proved an effective way to curb increasing IPR infringements in imports and exports," Wang said.

China builds another gas pipeline to fuel east

China on Friday afternoon launched a gas pipeline that runs from the southwestern inland of Sichuan to coastal Shanghai, another "energy artery" to fuel the booming but energy-insufficient east following the grand West-East gas project.

The 1,700-km pipeline is expected to channel 12 billion cubic meters of natural gas annually from the Puguang field in Sichuan Province to the central and eastern regions that cover Hubei, Anhui, Jiangxi, Jiangsu, Zhejiang provinces and Shanghai.

Addressing the launching ceremony, Vice Premier Zeng Peiyan said the project will serve as another "energy artery" of the country in addition to the West-East gas pipeline, which runs more than 4,000 kilometers from northwesternmost Xinjiang to Shanghai and began operation in 2004.

Zeng said the project offers an opportunity for the country's west, which boasts rich resources but lags far behind the east in economic growth, to tap its advantage in resources for development.

If things go well, the project, with an investment of 62.7 billion yuan (US$8.25 billion), will start to channel gas to Shanghai at the beginning of 2010, according to Chen Deming, vice minister in charge of the National Development and Reform Commission (NDRC).

When the project is completed, the clean energy resource is expected to help reduce carbon dioxide emission by tens of millions of tons annually, said Chen.

Proven reserves of the Puguang gas field may reach 430 billion cubic meters by the end of this year, said He Shenghou, an official with the China Petroleum and Chemical Corp (Sinopec).

China's proven reserve of natural gas has totaled 2.66 trillion cubic meters. The gas-rich country has been promoting the use of natural gas to improve energy buildup and cut air pollution.

Under an NDRC proposal on natural gas development, China aims to increase its natural gas pipeline to 4.4 trillion kilometers by 2010 to satisfy surging demand.

Although China's natural gas output would reach 94 billion cubic meters in 2010 from 58.6 billion in 2006, the country would still need imports to fill a gap of 16 billion cubic meters a year, according to the China Business News.

In Shanghai, demand of natural gas has soared from four million cubic meters in 2003 to 1.9 billion in 2005.

With the operation of the West-East gas pipeline, 1.2 billion cubic meters of gas is channeled to Shanghai from the Tarim Basin in Xinjiang every year.

China National Petroleum Corp (CNPC) has decided to build a second West-East pipeline to carry gas imported from Central Asia to the Pearl River and Yangtze River deltas.

Construction will begin in 2008 and gas supply in 2010. The designed annual production volume will be 30 billion cubic meters.

Coal, iron ore shipping rates rise to record for a 3rd day

The cost of hiring ships to transport dry goods such as iron ore, coal and grains rose to a record for a third day and may extend gains next week on expectation of rising Chinese demand.

The Baltic Dry Index, an overall measure of commodity- shipping costs on different routes and ship sizes, rose 1.5 percent to 7,586 Thursday, according to the London-based Baltic Exchange. It has advanced 5.2 percent in the past five days.

"The demand is just insatiable," Alex Harkess, director for dry-cargo chartering at Clarkson Asia Pte in Singapore, said by phone Friday. "Iron ore is moving predominantly from Brazil, Australia, South Africa and west coast India and it's all heading into one place, into China."

Steel consumption by China, the world's fastest-growing major economy, may rise 12 percent to 446 million metric tons this year, increasing to as much as 520 million tons by 2010, the China Iron and Steel Association said this month.

Record prices for iron ore and nickel are prompting producers including BHP Billiton Ltd. to expand output as China demands more commodities.

China's demand for coal is also pushing rates up. Its shift to a net importer of coal has also prompted countries including South Korea to look for the fuel elsewhere such as South Africa, causing a shift in routes which tie up ships longer.

Rates for hiring a capesize carrier, which typically hauls 175,000 tons of goods, to China from Tubarao in Brazil rose 1.2 percent to a record $65.75 a ton Thursday, according to the Baltic Exchange. Capesize carriers are the biggest type of dry- bulk vessels.

The daily rental rate for panamax carriers, capable of transporting 70,000 tons of dry goods in bulk, rose 1.9 percent to $60,275 yesterday, according to the Baltic Exchange.

The Baltic Panamax Index, a measure of rates on four routes for such vessel, added 1.9 percent to an all-time high of 7,472 yesterday, according to the Baltic Exchange. The measure last closed at a record on July 31 at 7,384.

China coal price to rise next year, CCTMA

China's coal price is likely to rise next year because of possibly tight supply, a report of China Coal Transportation and Marketing Commission (CCTMA) disclosed.

China's coal supply falls short of demand in the 2006-2010 period, and will lack of some 100 million tons of coal, the report said.

The report said that this was partly the result of the government's effort earlier this year to control new investment in coalmine development.

Although more output capacity will be put into operation next year, coal consumption growth will slow down with the government's control on high-energy consumption industries.

Chinese coal miner kicks off Hong Kong IPO

Summer is officially over in Hong Kong with the launch today of the formal roadshow for Hidili Industry International Development's initial public offering which could raise $500 million if priced towards the top of the price range.

The privately owned Chinese coking coal producer will be the first company to seek a listing in Hong Kong after the global equity market correction last month and consequently will be the first test of whether investors are willing to put their money on unproven stocks.

The response should be particularly interesting for the parties involved in the upcoming IPO of Sino-Ocean Real Estate, which kicks off pre-marketing today, and online roll-playing game provider Kingsoft, which started investor education last Thursday, as both have yet to decide on the final size and price range of their respective offers. It is widely expected that investors will ask for wider IPO discounts and more generous valuations versus peers in the same sector to compensate for the increased volatility that has followed in the wake of the subprime crisis. advertisement

That said, enthusiasm about the pilot scheme that will allow Chinese nationals to buy shares in Hong Kong has sparked a buying frenzy of Mainland-linked stocks in Hong Kong that has helped the Hang Seng Index to recover all of the losses caused by the subprime crisis in just two weeks. The index closed at a new record high on Friday, which ought to instil at least some confidence among potential investors.

Hidili also looks like a good candidate to re-open the market after the summer break as it is not that big in terms of size. It also offers a fairly unique story as it will be the first Hong Kong-listed coal producer to focus solely on coking coal which, because of its higher heat content, makes it ideal for the iron and steel industries. The other three Hong Kong-listed coal companies primarily produce thermal coal that is used by power generators. The valuation also looks reasonable with a significant discount to its peers.

Hidili is aiming to sell 600 million shares or 30% of its share capital and, according to sources, it has set a price range of HK$5.05 to HK$6.65. This will give a total deal size of HK$3.03 billion to HK$3.99 billion ($388 million to $511 million). The range is quite wide, which suggests the issuer wants some flexibility in case the markets remain volatile.

The deal will also include a 15% greenshoe that could lift the total proceeds to as much as $588 million. To help build momentum in the book, sole bookrunner UBS has signed up four cornerstone investors who will jointly buy $80 million worth of shares in IPO. Depending on the final price this will give them between 16% and 21% of the total deal pre-shoe.

The cornerstones are believed to be Hong Kong property tycoons Lee Shau Kee and Joseph Lau as well as Bank of East Asia Chairman David Li and the Malaysian Kuok family which controls the Kerry Group, Shangri-La Asia and the South China Morning Post. All four frequently participate in Hong Kong IPOs as cornerstones and are well-known for their ability to attract other investors ¨C especially retail players - to a deal.

People familiar with the deal say several other parties had expressed an interest in becoming cornerstones, which could result in additional support once the bookbuilding starts.

Of the total shares on offer, 83.3% will be new paper while the rest will be sold by Baring Private Equity and Hidili's 33-year-old founding chairman and CEO Xian Yang. Baring holds a 20% stake in the listing vehicle which it obtained through the conversion of a convertible bond issue earlier this year and will sell 80 million shares. The chairman, who currently owns 80% of the company, is selling 20 million shares, or a modest 1% of the outstanding share capital.

As usual, 10% of the offer will be earmarked for retail investors, but a standard clawback mechanism could boost this to a maximum of 50% in case of strong demand.

Hidili currently has 14 operational mines in the Sichuan province and acquired five new mines in the Guizhou province in the first quarter this year that will begin production in the second half. Including these new mines and capacity expansion at its existing operations, the company is expected to increase its raw coal output by 31% to 2.9 million tonnes in 2007 and to 3.7 million tonnes in 2008, according to a syndicate research report.

At the end of March this year, the company had 179 million tonnes of coal reserves and 217 million tonnes of resources. The raw coal is put through a washing facility and is then either sold or processed further in a coking plant that produces coke and other by-products. In 2006, Hidili sold 612,000 tonnes of washed coal, 472,000 tonnes of coke and 335,000 tonnes of high-ash thermal coal, all according to the syndicate report.

Among Hidili's key selling points are the high quality of its coal reserves and the fact that its new mines in Guizhou are close to its major customers in southwestern China and have better transport connections ¨C through established railways - to the steel plants in the Hunan, Guangdong and Guangxi provinces than the many coal mines in the Northern Shanxi province. This means Hidili has a cost advantage over several of its competitors in the north which face bottlenecks in railway or shipping capacity, observers note.

According to earlier research reports, UBS forecasts that China will see 8%-12% annual growth in steel production in 2007 to 2009, compared with just 5% for the global market and this will obviously benefit the producers of coking coal and coke, which are the major raw materials for steel production.

According to an energy sector analyst, only 17.3% of China's coal production was used for steel production in 2006 with the rest going to feed the fuel needs in the power industry, but as demand for both categories of coal is expected to remain solid this is a secondary consideration.

"Demand will not be a problem over the next few years. The key issues are the coal price trend, the valuation of the company and the quality of the management," he says.

The price for the two different coals have been on a similar upward trend in China with a more than 18% increase in the first half of this year, but the price for coking coal is about 50% higher than for thermal coal. And given that both types face similar overhead costs for mining and extraction and transportation, coking coal also has higher profit margins, the analyst says.

Aside from having to make a call on the direction of coal prices, investors will also need to consider the execution risks associated with Hidili's aggressive expansion plans. And then there is of course the poor safety record of China's many underground coal mines with frequent fatal accidents caused by explosions or flooding.

According to the sources, the IPO price translates into 11.5 to 14.5 times its estimated 2008 earnings, which is in line with the low- to mid-teens valuation that fund managers had earlier indicated they may be willing to pay. It equates to a discount of at least 34% and as much as 47% to larger players China Coal and China Shenhua Energy, which both trade at about 22 times next year's earnings after a strong run-up over the past three months. Smaller Yanzhou Coal is currently valued at about 18.5 times.

The syndicate report expects Hidili's revenues to increase by 53% in to Rmb1.25 billion ($166 million) in 2007 and by 58% in 2008, while the bottom-line is forecast to grow at 44% (excluding the fair value adjustment of its CB) in 2007 to Rmb552 million and by another 56% in 2008. The growth will be supported by a 10% increase in the selling price of the coking coal that Hidili produces at its Panzhihua mines in Sichuan and the estimate is that every 1% increase in the coking coal price will lead to a 0.7% rise in the 2007 net profit and a 1% increase in the 2008 profit.

Other revenue drivers will be an increase of long-term sales volumes to its existing customers and an expansion into the production of alloy pig iron that it began in 2006.

Aside from the capacity expansion that will come on stream this year, the company is also planning to acquire more mines and has already signed preliminary agreements to buy another 11 coal mines in Guizhou over the next 10-12 months. These mines have total resources of 238 million tonnes and could help to boost its profit growth above current estimates. Any acquisition is at the discretion of Hidili.

The offer will stay open until September 13 with the pricing expected to be determined the following day. The trading debut is scheduled for September 21.

WTO Complaints 'Very Disappointing': China

The World Trade Organization (WTO) launched an expert panel on Friday to probe whether China is illegally subsidizing its industrial exports as alleged by the United States and Mexico.

The US first filed the case to the WTO in February and later was joined by Mexico. The two countries complained that China was using tax breaks and other incentives to "subsidize" its exports, which might violate WTO regulations.

At Friday's meeting of the WTO's Dispute Settlement Body, China again defended its position, saying its tax measures mentioned by the United States and Mexico in the case are consistent with WTO regulations.

It is "very disappointing and deeply regrettable" that the United States and Mexico pursue this matter further by requesting the establishment of the panel for a second time, the Chinese delegation said in a statement.

The US and Mexico had requested for a WTO panel on the dispute last month, but was rejected by China according to related WTO regulations.

"In the panel process, China will defend its position and interests and remain confident that relevant measures of China are consistent with its WTO obligations," the statement said.

In a separate case on Friday, China blocked an initial request by the United States for a WTO panel to investigate China's protection and enforcement of intellectual property rights (IPR).

"China consistently spares no efforts to enforce its IPR legislation with great success acknowledged by the international community," the Chinese delegation said in a statement.

Asia's Largest Airshow Takes off in Hong Kong

The world's largest passenger jet will fly past Hong Kong's mass of skyscrapers and the city's famed Victoria Harbour on Monday to raise the curtain for Asia's largest airshow.

The double-decker Airbus A380 may fly as low as 1,000 feet (300 metres) -- just off the territory's tallest landmark, the 1,400-foot International Finance Centre (IFC).

The spectacle will mark the beginning of the four-day show despite an accident in Bangkok that damaged the tip of the jumbo jet's left wing, forcing it to delay its Saturday takeoff on an Asian tour.

The Asian Aerospace International Expo and Congress will see 500 exhibiting companies from more than 20 countries and 10,000 trade visitors in the city to scrutinise the latest industry developments.

The conference is being held in Hong Kong for the first time in 25 years, since it moved from its original home in Singapore, a shift that organisers say reflects the booming aviation market.

China boasts the world's fastest-growing airline passenger sector with domestic flights expected to double every five years and China's fleet of aircraft to quadruple in number over the next 20 years.

But the boom in aviation is not confined to China, according to industry experts, with South Asia also at the forefront.

Jim Eckes, managing director of Indoswiss Aviation, a consulting firm, said opportunities in the Indian market could be the biggest of all.

"I do not see the growth in China continuing for the next 20 years in the same way, but with India you have mergers and new airports being built that could see the kind of growth that China has seen in recent years," he told AFP.

Although India had just three private airlines in 2003, at least 14 are now seeking government approval and around 480 aircraft are on order for delivery through to 2012.

The aviation industry will also follow the continuing battle between European aircraft maker Airbus and arch US rival Boeing on any new orders in Asia, which is expected to account for a third of aircraft orders over the next 20 years, making it the number two region behind North America.

China is becoming an increasingly important part of that market both as a competitor and a partner.

Earlier this year, Airbus announced it would open an assembly plant in the northern city of Tianjin, which will eventually make four small to medium range A320 aircraft a month.

China's State Council or cabinet has also approved plans to build large passenger aircraft itself aimed at taking on the industry giants, not just at home but eventually worldwide

Organisers said the show has been scaled down since its move from Singapore, mainly as a result of shedding exhibitions from the military sector but it has added exhibitions focusing on aircraft interiors and the air freight sector.

France's Total acquires 20 gas stations in north China

France's Total has acquired more than 20 private gas stations in the northeastern Chinese province of Liaoning, as well as a number of oil wholesalers, according to industry officials.

The purchase was confirmed by the head of the oil distribution section of the China General Chamber of Commerce, Zhao Youshan, at a private oil company conference over the weekend.

Although the oil retail and wholesaling markets have already been opened up to foreign companies in order to meet China's commitments to the WTO, domestic companies have continued to face restrictions.

Government controls over prices, as well as the monopoly that the China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (Sinopec) have over upstream oil supplies, have persuaded many private companies to consider selling to foreign firms.

In June, 80 private oil companies announced their intention to sell up to a group of international oil majors including Shell, BP and Mobil, but the deal was blocked by the state planner, the National Development and Reform Commission.

Sinopec May Extend Refining Losses Unless Oil Falls

China Petroleum & Chemical Corp., Asia's biggest refiner, may extend losses from processing oil unless the cost for a barrel of the fuel falls below $64, two company officials said.

Domestic fuel prices have been kept below global levels by the government, causing refining losses for China Petroleum, one of the officials said in Shanghai on Aug. 31, asking not to be identified because of company policy.

Sinopec, as China Petroleum is known, have turned to losses since July, after making profits in the first half, as crude prices soared to records in August. China controls prices of diesel and gasoline to curb their impact on inflation, which climbed 5.6 percent in July, the highest in more than 10 years.

"Sinopec will continuously be pressured by crude costs as it's unlikely the government will raise fuel prices in the short term, given the nation's inflation rate," Zhang Guojun, an oil analyst with Pingan Securities Co., said by phone.

Benchmark oil prices in New York gained 10.4 percent in June and 11 percent in July. Prices have eased 6 percent since hitting a record of $78.77 a barrel on Aug. 1. Crude for October delivery rose by 0.24 percent to $74.23 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 2:53 p.m. Beijing Time.

Stronger Yuan

The stronger yuan has helped domestic oil refiners offset higher crude costs. The Chinese currency has advanced 3.5 percent against the U.S. dollar this year amid speculation the government will tolerate further appreciation because of gains in the domestic stock market and the nation's strong economy.

The appreciation of the yuan and higher prices for naphtha and chemicals, raw materials for plastic carrier bags to synthetic fibers, have helped to increase the breakeven point for the refining business from $60 a barrel last year, said a second company official.

PetroChina Co., the nation's largest oil company, can make a profit from refining with crude at $65 a barrel, Zhang Hong, deputy chief economist of PetroChina Refinery & Marketing Co., said June 30.

Sinopec is "working" to get a government subsidy for selling fuels below international prices, President Wang Tianpu said Aug. 27. The company received a one-time 5 billion yuan subsidy at the end of last year to help cover raw material costs, after being handed 9.42 billion yuan a year earlier.

The refiner, which supplies about 80 percent of the fuel in the country, incurred losses from processing crude in July and August, Deputy Chief Financial Officer Liu Yun said Aug. 10.

Increased Prices

China increased gasoline and diesel prices twice last year to help refiners cope with rising raw material costs.

Sinopec shares fell 1.1 percent to HK$8.41 in Hong Kong at 2:55 p.m. The stock has risen 78 percent this year, outperforming PetroChina's 30 percent gain, and the benchmark Hang Seng Index's 36 percent increase.

First-half net income surged 66 percent to 36.2 billion yuan after it gained an operating profit of 5.49 billion yuan from refining during the period, compared with a loss of 16.6 billion yuan a year earlier, the company said Aug. 27.

The refiner expanded oil processing 6.4 percent, turning 2.91 million barrels of crude a day into fuels and chemicals in the first half to supply the world's fastest-growing major economy.

China is unlikely to raise fuel prices in the second half of this year because inflation is running above government targets, Rong Guangdao, chairman of Sinopec Shanghai Petrochemical Corp., a unit of Sinopec, said earlier this week.

China private oil firms urged to use anti-monopoly law for guaranteed supply

Private oil companies in China are urging one another to take full advantage of the recently issued Anti-Monopoly Law to secure guaranteed supply of oil and avoid over-reliance on the country's two major oil producers for their survival.

Dependent on the China National Petroleum Corporation (CNPC) and the China Petroleum and Chemicals Corporation (Sinopec) for oil supplies and forbidden by law to extract or import their own, China's private oil industry had been urging the government to introduce policies aimed at creating a level playing field for all participants in the sector.

"We should work together and use every opportunity to complain to the government when we feel the law is being violated," said Wang Jian, the head of the private oil company association in eastern China's Shandong province.

Zhao Youshan, the head of the China General Chamber of Commerce's oil distribution section, told reporters at a conference over the weekend that the new law would finally enable China's small private oil firms to protect themselves against the monopoly practices of CNPC and Sinopec.

"The law provides guaranteed safeguards... and we can now use legal weapons to protect ourselves," Zhao said.

However, some industry representatives were less than optimistic, saying that the clause in the law that protects strategic national industries could also allow the oil majors to resist the legislation without much upheaval.

The new legislation applies only to industries that are not "government-stipulated monopolies", and it is not yet clear whether that includes the oil distribution and retail business, delegates said.

"Now the anti-monopoly law has emerged, private oil companies can develop relationships with other countries like Saudi Arabia or Russia and see if they can import oil," said Wang of the Shandong private oil company association.

"Or they can see if they can cooperate with refineries from other regions, and this will test whether or not the anti-monopoly law can be successful," he said.

Jean Christophe Iseux, a special advisor to the Chinese government and visiting professor at the People's University, said that if the law is not adequately implemented, it could actually reinforce the monopoly status of the country's big oil companies.

"The law tends to exclude large companies from the law, such as CNPC, Sinopec or CNOOC," he said.

Policy support has become crucial, with many small oil companies struggling to continue in the face of recent supply cuts by CNPC and Sinopec.

Despite opposition from the state oil corporations, the government is currently considering a plan to provide a guaranteed source of oil products for the private firms, and may also make it easier for them to import oil.

Since the beginning of last year, 50 private oil enterprises have already gone bankrupt and a further 250 are going through financial difficulties , said Zhang Shunjie of the Liaoning Panjin Xinglong Petrochemical Corporation.

Sinopec still No. 1 on China's top 500 companies list

Sinopec, Asia's largest oil refiner, remains China's highest-grossing company, according to an annual list of the country's top 500 firms seen on Monday.

Sinopec retained top spot for the third straight year with revenue exceeding 1.06 trillion yuan (140.5 billion dollars) last year, said the list by the China Enterprise Federation.

The company was the only one on the list, now in its sixth year, to exceed one trillion yuan in revenue.

All companies in the top 10 are state-owned enterprises, underlining the continued prevalence of state control over Chinese industry despite decades of liberalisation.

They included two oil companies, two electric utilities, three commercial banks, two telecom operators, and one insurance company.

Hong Kong-listed Gome Electrical Appliances Holding, China's largest home appliance chain, was the only privately-held listed company among the top 50 companies, moving up to number 37 from last year's 53rd spot.

Huang Guangyu, the founder of Gome, was named China's richest person last year by Forbes magazine with a net worth of 2.3 billion dollars.

The official China Daily said on Monday the revenue of firms on the list increased by 23.7 percent from a year earlier while profits jumped 25.9 percent largely due to continued growth from mergers and acquisitions.

A total of 131 companies on the list merged or acquired 408 other businesses last year, the report said.

However, the profitability of firms on the China list still lags behind that of the world's top 500 companies compiled annually by Forbes, recording a profit margin of 4.72 percent compared with the global giants' 7.32 percent on average, the paper added.

China, Australia may seal LNG deals

China and Australia could be finalising two gas sales agreements this week, according to regional media reports.

Chinese President Hu JinTao, who is arriving in Sydney for the APEC leaders' summit this evening, will be witnessing the signing of preliminary agreements for gas supply from the Shell-operated Gorgon project and the Woodside-operated Browse basin project, according to The Australian newspaper.

Shell would be supplying three million tons of gas from its 25 percent share of Gorgon LNG to CNOOC's terminal in Ningbo, Zhejiang, while Woodside Petroleum would be exporting gas on a long-term basis to PetroChina's 3.5-ton LNG terminal in Rudong, Jiangsu Province, according to an Interfax news report.

The agreement between Shell and CNOOC, if finalised, will mark a closure to more than two years of negotiation and tussle over the gas pricing between the Gorgon partners and the Chinese company. Negotiations between the Gorgon partners and CNOOC broke down after the partners, led by project operator and stakeholder Chevron, failed to reach agreement with the Chinese.

Chevron since elected to divert the LNG sales away from CNOOC to three Japanese utilities companies, while Shell had previously planned to market its full 25 per cent share to the United States though Sempra's Energma Costa Azul terminal in Baja California, Mexico.

China planning expansion of oil refineries

China is planning a major expansion of its oil refineries to help reduce reliance on imports and keep up with demand, a state-run newspaper reported over the weekend.

Plans call for the country to have 31 refineries by 2015, each with a capacity to process 10 million tons of crude oil a year (220,000 barrels a day), the Economic Observer reported. At the end of last year China had only nine facilities with similar capacity.

The National Development and Reform Commission, China's main planning agency, also expects by 2015 to have 30 ethylene factories, each with an annual output of 1 million tons a year, the report said, citing unnamed officials.

China Petrochemical Corp., or Sinopec Group, is planning about 20 refineries able to process 10 million tons of crude oil a year, it said. Some would be new but most would involve less costly expansions of existing refineries.

PetroChina, China's biggest oil conglomerate, is expected to build at least 10 refineries of the same size, the report said.

An official at Sinopec's investor relations department, who declined to give his name, said he could not immediately confirm the report because he needed to check with other departments. Calls to the office of the spokesman for PetroChina rang unanswered.

The news office of the NDRC asked for a written request for information, but gave no immediate response.

Sinopec, Asia's largest refiner by capacity, and other refiners have struggled with losses from refining as crude oil prices have soared in the past two years. But the expansion plan reflects China's long-term agenda for meeting soaring demand and building up its chemicals sector.

"At the moment China still needs to import some oil products. If we don't expand our refining capacity we won't manage to satisfy surging demand in the coming years," the newspaper quoted Tian Chunrong, an engineer in Sinopec's information department.

Based on an estimated cost of 15 billion yuan (US$2 billion; €1.5 billion) per new refinery, the total amount of investment involved in setting up 30 refineries on the scale planned would be at least 200 billion yuan (US$26.5 billion; €19 billion), the Economic Observer said.

Separately, Sinopec said Monday that it has begun building a natural gas pipeline from the Puguang gas field in southwestern China's Sichuan province to Shanghai. The 1,700 kilometer (1,000 mile) pipeline would have an annual capacity of 12 billion cubic meters (423.7 billion cubic feet) a year.

Yunnan Zhanhua Synthetic Ammonia Project Mainly Completed

Recently 500kMT/year Yunnan Zhanhua Synthetic Ammonia Project contracted by Chinese Chemical Engineering Group accomplished project target of finishing synthetic ammonia equipment and coal gasification equipment.

This project applies the world's most famous coal power gasification technology developed by Shell to synthetize ammonia and is world's largest synthetic ammonia equipment using coal as raw material with advanced process, good equipment and low operation cost.

Hunan's First Coal-to-Alcohol Ether Project Approved

Recently Hunan DRC approved to establish Hunan Zhongchun New Energy Co.,Ltd's 200kMT/year methanol, 100kMT/year DME project using coal as raw material.This is the first approved coal-to-alcohol ether project in Hunan Province.

Located in Yongxin County rich in coal reserves, the project will use coal to produce clean and substitutive energy including methanol and DME with total investment at ￥526.79million.

Coal Gasification Technology in China will Realize Industrilization within 5 years

Experts attending Forum on Cooperation of Chinese Academy of Sciences and Xinjiang Province said coal gasification technology, significant to Chinese energy structure, can be industrialized in 5 years.

Sun Yuhan, Head of Shanxi Coal Chemical Research Institute of Chinese Academy of Sciences, said coal chemical industry is hindered by slow progress in coal gasification technology research. It will still take 5 to 8 years to realize large-scale utilization of coal gasification technology.

Although China has developed ash agglomeration technique featured high adaptation to different types of coal and low investment and oxigen consumption, there is no commecialized model equipment using this technology, which makes it difficult to popularize and meet the pending demand of coal chemical development.

As estimated, in 2010 the annual consumption of coal for gasification can reach 100millionMT with methanol, coal-to-oil and coal-to-olefin equipments in construction all having urgent demand of coal gasification technology.

Coal supply meets domestic demand in 1H

The National Reform and Development Commission (NRDC) reported yesterday that China's coal supply meets domestic demand in the first half of 2007.

The top economic planner said the production of coal increased 10.1% to1.26 billion tons in the first half. Compared with the production growth in 2006, the growth rate was 2.5 percentage points higher this year. The total supply by major enterprises of raw coal increased 11.4% to 1.08 billion tons.

According to NDRC, China changed from a net exporter of strategic resources to a net importer, as a result of the state policy for restricting on coal export and encouraging import and appreciation of RMB.

China imported 27.07 million tons of coal in the first six months, up 47.6% over the same period last year, and coal export reached 23.12 million tons, down 27.9%. The net imports were 3.95 million tons compared with 13.74 million of net exports. The supply of coal increased 17.69 million tones in total.

For the consumers, fixed-asset investment was continuously growing and consumption products of coal rose quickly during the period.

NRDC estimated the consumption of coal for the whole year would rise 12.2% to about 1.263 billion tons, and the growth rate would be 2% higher compared with 2006.

Jiujiang invests 2 billion yuan in power grid works

Days ago, Jiujiang City, in view of the rapid development of the society, has revised its Jiujiang Power Grid Plan for the 11th five year plan.

This city plans to invest 2 billion yuan in building 15 works of power transmission and transformation between 2007 to 2009, and strive to lift the power supply reliability rate by 0.14% and reduce the average period of power failure for each customer by 12.26 hours per year.

State ultra-high pressure power grid to extend to Wuhan

In the year of 2010, the state ultra-high power grid is going to be extended eastward to Wuhan, when the supply capacity of Hubei power grid is strengthened.

It is said that by 2010, the ultra-high power lines will extend northward to the north of Shaanxi Province and Beijing, eastward to Wuhan and Shanghai so that the three main great power grids, the north, the middle and the east of China, will get simultaneously linked.

Shanghai Power to be acquired by parent Shanghai Electric

Shanghai Power Transmission & Distribution Co Ltd said yesterday it would be acquired by its Hong Kong listed parent, Shanghai Electric, through a share swap aimed at boosting competitiveness.

Under a proposal, Shanghai Electric would buy shares it does not already own in Shanghai Power by issuing new domestic currency A shares to Shanghai Power shareholders, it said in a statement.

The acquisition - the latest in a series among state-run Chinese companies ¨C would create a group with a combined market capitalisation of US$7.3bil.

Some 12,000 mt Saudi-origin ethylene sold to Taiwan

About 12,000 mt of Saudi-origin ethylene has been sold to Taiwan for September delivery as part of an incremental contract volume, market sources said Friday. The first 6,000 mt portion of the sale was set last week, with the second half of the parcel transacted Thursday, sources noted.

Saudi-origin ethylene supplies have recently become ample due to a series of monoethylene glycol plant problems. Market sources said the output of plants owned by Eastern Petrochemical (SHARQ) and Jubail United Petrochemical (JUPC) at Al Jubail have been reduced, partly due to an ethylene oxide supply problem.

SHARQ has three MEG lines with a total MEG production capacity of 1.35 million mt/year, while JUPC's MEG plant is capable of producing 575 million mt/year. A SABIC company source declined to disclose details of the run cut this week.

For its part, Taiwan has been under pressure from an ethylene shortage caused by the unexpected shutdown of Formosa Petrochemical's No. 1 naphtha cracker last week. The cracker restart had originally been set for Tuesday, but sources now say the earliest possible restart date will be September 20. The unit is capable of producing 700,000 mt of ethylene yearly.

Despite the influx of Saudi-origin material, the Northeast Asian ethylene market remained relatively stable this week as spot availability from regional suppliers remained tight.

For example, in South Korea - one of the regions largest sources of spot ethylene - supplies are tight due to a naphtha cracker turnaround by Honam Petrochemical. The unit, which has an ethylene production capacity of 720,000 mt/year, is scheduled to be shut for September 27 to October 26.

Northeast Asian prices are pegged at $1,260-1,270/mt CFR as of early Friday, unchanged from the pervious week.

GYCIG and Qingdao Yinke developed key technology for TDID

On August 29th, the research projects of "Development and Application of Key Technology for 50 thousand t/y TDI Production Device" and " Development and Research of Key Technology for 50 thousand t/y MDI Engineering Device" passed the appraisal by the appraisal committee with Li Junxian, academician of China Academy of Science, as the chairman.

This committee believe that the achievements of the above projects have reached the international advanced technological level. According to the introduction, the above projects have been jointly undertaken and accomplished by Gansu Yinguang Chemical Industry Group Co., Ltd and Qingdao Yinke Hengyuan Co., Ltd. The project of Development and Application of Key Technology for 50 thousand t/y TDI Production Device can increase the output of TDI greatly.