China's landmark property law takes effect

China's landmark Property Law that provides equal protection to both state and private properties was put into effect on Monday.



The law approved by the national legislature in March after repeated revisions and unprecedented eight readings is seen as a significant step in the country's efforts to further economic reforms and boost social harmony.

The 247-article law stipulates that no units or individuals may infringe upon the property of the state, the collective and the individual.

"The law will inspire people's enthusiasm to create wealth and is helpful for them to fully enjoy the fruit of reform and opening-up," said Xu Xianming, president of the China University of Political Science and Law.

To give equal protection to private property by law is in accord with the Constitution, the proposition of the Communist Party of China and people's common requests, according to Wang Liming, a professor of Renmin University of China who participated in the legislation process of the law.

However, the bill had met with doubts and opposition from people who argued private property should not be leveled with state property.

In response, senior legislator Wang Zhaoguo said during the parliamentary full session in March that it will be impossible to develop the socialist market economy or to uphold and improve the basic economic system of socialism if equal protection is not secured.

"Under China's socialist market economy, all players enjoy the same rights, observe the same rules and bear the same responsibilities," said the vice chairman of the Standing Committee of the National People's Congress (NPC), China's top legislature.

To address public concerns over fraudulent acquisitions and mergers of state property, the law stipulates that illegal possession, sharing, and destruction of state property is prohibited. Those who cause loss of state property shall bear legal liability, according to the law.

The concept of improving the protection of private property was first brought up at the 16th National Congress of the Communist Party of China held in November 2002. In March 2004, the NPC adopted a major amendment to the Constitution, stating that people's lawful private property is inviolable.

Construction begins on Tibet's biggest logistics center

Authorities in Tibet started building the region's biggest logistics center on Friday in a bid to further exploit the potential of the Qinghai-Tibet Railway that opened a year ago and boost the region's economic development.
The logistics center, covering 533 hectares, is located next to a railway station at an altitude of 4,500 meters in Nagqu Township of Nagqu County in northern Tibet.

It is scheduled to be finished within 15 months, costing almost1.5 billion yuan (200 million U.S. dollars), according to Hao Peng, executive vice chairman of the Tibet Autonomous Region.

The center is expected to handle 2.23 million tons of cargo by 2015 and 3.1 million by 2020, including raw minerals, local herbs, construction materials and commodity goods.

"The northern part of Tibet is rich in natural resources, and the Nagqu logistics center will provide easier access to the resources, which will drive the industrial development and trade in the area and raise its self-development capabilities," said Lu Chunfang, vice minister of railways, at Friday's inauguration ceremony.

Dunzhu, a local herdsman, told Xinhua that she supported the idea.

"To me, it means that I have access to more commodity goods my family needs, and easier ways to sell our dairy goods," she said.

The 1,956-km-long Qinghai-Tibet Railway opened on July 1 last year has linked Tibet with the rest of China by train for the first time.

Tibet's gross domestic product (GDP) posted a 14.7-percent growth to reach 14 billion yuan (1.84 billion U.S. dollars) in the first half of this year, the highest over the past decade, according to the Tibet Regional Statistics Bureau.

Thanks to the opening of the Qinghai-Tibet Railway, the tertiary industry, which features the consumption market and service industry, has developed fast in the past year, the bureau said.

First privately-funded Chinese railway begins operation

A railway linking Quzhou and Changshan in east China's Zhejiang Province, the first railway funded in part by private investment since 1949, began operating on Friday.
With a length of 41 km, the feeder railway would be used mainly for cargo transport, said Wang Feng, deputy chief of the Shanghai Railways Administration.

Quzhou-Changshan railway would be included as a section of another planned trunk railway linking Quzhou to Jingdezhen and Jiujiang, both cities in east China's Jiangxi Province.

The Quzhou-Jingdezhen-Jiujiang railway was an important link, joining major railways in China, including the Beijing-Kowloon line between the capital and Hong Kong.

Construction on the Quzhou-Changshan line began in November 2005 and was completed at a cost of 675.1 million yuan (84.39 million U.S. dollars).

Funding was provided by the Shanghai Railways Administration, Changshan County State-Asset Operation and Management Co. Ltd., Zhejiang Provincial Railways Investment Group Co., and Changshan Cement Co., Ltd., a private business.

Changshan Cement, which has a materials production base in Changshan, holds an 18.88-percent stake in the railway.

Wang said Quzhou-Changshan railroad was a tiny section out of China's massive railway network, but it served as a milestone in the country's efforts to reform financing for railway construction.

Previously, railway investment in China had long been monopolized by governments at central and local levels.

After the private investment in Quzhou-Changshan railway was published in February 2005, the preparatory group for construction of the Wuhan-Guangzhou passenger express rail in June 2005 announced that they would raise 24 billion yuan (three billion U.S. dollars) from home and abroad to build the trunk line.

The funds would make up about 20 percent of the 116.6 billion yuan (14.58 billion U.S. dollars) needed to finance the Wuhan-Guangzhou passenger express line, while the Ministry of Railways would provide 51 percent, and local governments in the three provinces of Guangdong, Hunan and Hubei would cover the remainder.

When the express railway is put into service, a trip from Wuhan to Guangzhou will take four hours, compared with seven at present, and the Beijing-Guangzhou trunk railway line will only handle cargo services.

The Chinese mainland had 76,600 km railways in service last year, ranking third in the world by length after the United States and Russia.

In accordance with a blueprint for medium and long-term development of railway networks approved by the State Council, China's cabinet, 100,000 km of railways will be in operation by 2020.

It is estimated that in the next 15 years, two trillion yuan (250 billion U.S. dollars), or 100 billion yuan (12.5 billion U.S. dollars) a year, will be spent on construction of railway networks in China.

Logistics terminal

China's first African logistics terminal, seen as an important development in Sino-Africa trade relations, opened on Wednesday in Tianjin.

The Tianjin Port GMT Africa International Logistics Terminal, located in the Tianjin Port Free Trade Zone, covers an area of 60,000 square meters including a 5,500-square-meter warehouse. The terminal will deal with Sino-Africa imports and exports.

China Internet advertising to rise 50 pct this year

China's internet advertising is expected to expand by 53.07 percent this year, approximately one percent higher than the previous prediction of 52.2 percent in January, according to the Data Center of the China Internet (DCCI) report.
The total revenue of the network advertising market reached 4.98 billion yuan in 2006, excluding Internet search engine advertising, taking about six percent of the whole advertising market, including print and television.

DCCI figures show China's overall Internet advertising market reached 3.27 billion yuan in the first half. The expansion maintained a good momentum and was expected to grow 32.5 percent in the second half, due to the Olympic Games-related advertising and the increasing emphasis on network advertising in traditional industries.

A report released by China Internet Network Information (CNNIC) in July said China's Internet users totaled 162 million in the first half, compared with 137 million last year.

China to develop tourism in Three Gorges Dam region

China's Three Gorges Dam region will receive 26.9 billion yuan (3.5 billion U.S. dollars) from 2007 to 2020 to develop tourism to provide jobs for people relocated for the project.

The investment aims at realizing the government's plan to build tourism into the pillar sector in the Three Gorges Dam region, in order to generate 20 billion yuan, or 24.7 percent of the area's GDP by 2020.

The Three Gorges tourism development plan, which outlined the investment schedule, issued by the National Development and Reform Commission, has been approved by a group of experts in tourism and city planning organized by the government.

Li Chunming, vice governor of central China's Hubei Province, said a booming tourism industry could provide relocated households with stable incomes and would not threaten the already fragile ecological environment.

The fund, financed by government allocations and outside investments, would be used to upgrade the tourist ferries along the valley, build roads and docks forming a traffic network, improve tourist facilities and traffic infrastructure such as accommodation and catering, preserve historic sites and the develop culture-oriented attractions.

The blueprint includes a national top-class rafting route and cultural tours based on two famous historic figures, Qu Yuan and Wang Zhaojun, whose hometowns are in Hubei Province.

US approves 6 new flight routes to China

The US Transportation Department Tuesday approved six new flight routes to China, including two to be launched ahead of the Beijing Olympic Games.

In a press release, the department said it made a final decision to award Atlanta-based Delta Airlines a new direct route from Atlanta to Shanghai and approved Chicago-based United Airlines a direct route from San Francisco to Guangzhou.

The two flights will begin in the first half of 2008, according to Delta and United Airlines.

The department also announced proposed awards for four daily flights to begin in 2009: American Airlines for a Chicago-Beijing service; Continental Airlines for a Newark-Shanghai service; Northwest Airlines for a Detroit-Shanghai service; and US Airways for a Philadelphia-Beijing service.

The final decision on these four routes will be made after a public comment period. Usually, other airlines have 14 days to file objections and the Transportation Department has seven days to review potential objections before issuing a final decision.

"By bringing China and the United States one step closer, we increase our ability to compete, boost our success in the global market place, and make international travel for all passengers easier and more affordable," said US Transportation Secretary Mary E. Peters while announcing the new routes.

In March this year, United Airlines began to operate a daily flight from Washington to Beijing, the first non-stop service between the capitals of the two countries.

Cereal shipping costs cut

China, the world's biggest grain consumer, will cut rail costs to ship cereals from its main northeast production region, seeking to ease rising food costs that have driven the inflation rate to a 10-year high, Bloomberg News reported.

The surcharge on grain shipments under the so-called rail construction fund will be fixed at 18 yuan (US$2.40) per metric ton, replacing the current method which increases costs based on distances shipped, the National Development and Reform Commission said on its Website yesterday.

China last week said it would cut soybean import duties and sell some of its pork, vegetable oil and grain stockpiles to ensure supplies during two weeks of celebrations that started this week. Consumer prices rose to a decade-high 6.5 percent in August, with 92.3 percent of that increase attributable to food costs, the commission said.

"This helps make our soybeans, corn and rice more competitive to shipments from overseas," said Li Shouchun, a manager at Datong Futures Co, in Harbin City, northeastern Heilongjiang Province.

China's wool imports surge 27% in 1st 7 months

China imported 202,000 tons of wool in the first seven months of this year, up 26.8 percent on the same period of last year, the General Administration of Customs said on Thursday.
The imports were valued at 1.13 billion U.S. dollars, up 61 percent, or 5,619 U.S. dollars per ton on average, up 27 percent.

Of the total imports, 128,000 tons, or 63.5 percent, came from Australia, up 20.3 percent. The European Union supplied 14,000 tons, up 90.7 percent.

State-owned enterprises accounted for 86,000 tons, or 42.6 percent, of the imports, while foreign-funded companies made up 64,000 tons, 31.8 percent.

Customs sources said the increase in imports was largely due to short supply and mounting demand at home, as the global wool processing center is shifting to China.

China processes more than 400,000 tons of wool a year, one third of the world's total.

Growing imports have aggravated environmental concerns in the wool processing industry, the sources warned.

The wool scouring and processing techniques result in different poisonous chemicals being released in the waste water. However, many domestic enterprises do not have advanced processing techniques and sound environmental protection awareness.

The algae outbreak this June in Taihu Lake, the nation's third biggest freshwater lake in east China, was partly due to the discharge of waste water from the huge number of wool processing mills located around the lake, whose overall processing capacity accounted for 70 percent of the nation's total.

The General Administration of Customs called on local wool enterprises to update their technology, establish sound industry standards and reduce the potential hazards for the environment.

Egypt hails China's economic, social achievements

CAIRO -- Egyptian Culture Minister Farouq Hosni on Saturday hailed China's great achievements in social and economic sectors and expected more bilateral cooperation in the economic and cultural fields.

Hosni made the remarks while addressing the opening ceremony of a photo exhibition, "Chinese people's life through camera," held in Cairo Opera House.

He noted that the exhibition shows the Chinese people's new life and a rapidly-changing China, where the social and economic achievements are attracting worldwide attention.

"Egypt and China both have long and brilliant culture and history," Hosni said, adding that Egypt welcomes more Chinese cultural and economic activities and expects more Egyptian-Chinese cooperation in the economic and cultural fields.

While touring the photo exhibition, Hosni told Xinhua that the exhibition is wonderful and he is keen on learning more about China through the exhibition.

For his part, Chinese ambassador to Egypt Wu Sike said in a speech that more and more Egyptian friends are observing the great changes in china and the status of the Chinese people's life.

"The exhibition is another effort to boost the bilateral exchange and cooperation, which provides a good platform for the Egyptian public to know more about China and the Chinese people's life," the Chinese ambassador noted.

The photo exhibition is aimed at reflecting the social and economic development in China and the life, work, leisure and entertainment of the ordinary people. It also highlights the 5,000- year Chinese civilization and the harmony among ethnic groups in China.

The exhibition, which will last until October 9, comprises about 160 photos taken by Chinese and oversea photographers.

China, Australia set up light alloy research center

A Chinese aluminium company and an Australian university signed an agreement here Saturday to set up an international light alloy research center.

The research center to be set up by Aluminium Corporation of China Ltd, also known as Chalco, and Monash University of Australia, will focus on design, processing, performance analysis, promotion and application of light alloys as well as talent training.

The establishment will provide strong technology and research support for Chalco and other Chinese companies who plan to have long-term investment in Australia, sources from the company said.

Chalco, China's largest aluminum maker, won the bid for Australia's Aurukun bauxite project in March this year after edging out BHP Billiton, Xstrata, Comalco Aluminium, and Alcoa and Alcan.

The project, with a construction cost of 3 billion Australian dollars(about 2.41 billion U.S. dollars), is designed to extract 7.5 million tons of bauxite and refine 2.1 million tons alumina annually.

Chalco is listed in New York Stock Exchange, Hong Kong Stock Exchange and Shanghai Stock Exchange. Its market value exceeds 80 billion U.S. dollars.

Firm wins IPR Lawsuit against Schneider

A Chinese low-voltage product company won a patent infringement lawsuit against French Schneider Electric and its Chinese sales agent on Saturday, which involves 330 million yuan in compensation.

A court in East China's Zhejiang Province ordered that Schneider, a major electric equipment maker, and its authorized distributor Leqing Branch of Star Electric Equipment Co. Ltd. in Zhejiang, stop selling five models of products that are based on the technology owned by Chint Group, China's leading manufacturer of low-voltage electric apparatus.

In addition, Schneider should pay 334.8 million yuan (US$43 milion) in ten days to compensate Chint's economic losses due to the unauthorized production and sales of the apparatus, according to the verdict handed down by Wenzhou Intermediate People's court on Saturday afternoon.

Court investigations show that Schneider earned 883.6 million yuan (US$117 million) by selling the five models of apparatus, which fell in the protected scope of Chint's patent right, from August 2004 to July 2006 and made a profit of 334.8 million yuan.

Before the court ruling, the State Intellectual Property Office had refuted Schneider's application of invalidating the disputed technology, which is "a crucial step for Chint that confirms the legal foundation of the case," said Xu Zhiwu, Chint's legal representative.

The amount of compensation is believed to be the highest in China concerning intellectual property disputes.

Schneider Electric had no immediate comment.

China's Huawei Plans to Tap IPTV Market in India

Leading Chinese telecommunications network provider Huawei is planning to tap the relatively unexplored Indian market for its IPTV (Internet Protocol Television) products.

"The potential of IPTV products in India is immense," said director (Integrated Marketing Communications) of Huawei Meddy Lu. "India has not grown very fast in terms of IPTV connectivity but there is a huge requirement for these products," she said. However, she did not elaborate on the amount of investment the company plans.

The proposed move assumes significance in the wake of broadcast regulator Telecom Regulatory Authority of India's (TRAI) announcement earlier this week that a draft paper on IPTV services in India is expected to be ready within a month.

Coal India arm to jack up output

Central Coalfields Ltd (CCL) aims to produce 78mt coal per annum by 2012 compared with 44mt at present. The Coal India subsidiary will take up two big projects at Magadh and Amrapali to achieve this target. It plans to produce 20mt and 12mt annually at Magadh and Amrapali, respectively.

The department of public enterprises is expected to give a mini ratna status to CCL next week.

The company will also develop smaller mines with a capacity of 3-4mt at Konar, Karo and North Urimari. It will expand the capacities of the Ashoka and Piparwar mines to 10mt each by next year from 6.5mt, said R.P. Ritolia, chairman and managing director of CCL.

CCL will invest Rs 2,500 crore during the Eleventh Five Year Plan to boost production.

For the big projects, the company will invite investors who will provide technology and equipment. Coal will be produced according to a target set by CCL. Investors will be paid on the basis of per tonne coal produced.

CCL will also use the highwall technology to produce coal from exhausted open cast mines. "CCL and South Eastern Coalfields have already floated global tenders for highwall mining," Ritolia said. Mines in the US produce 20-30mt coal annually by using this technology.

Mozambique in talks to fund $180 mln coal terminal

Mozambique's state-owned Ports and Railways Company (CFM) said on Saturday it was in advanced talks to fund the construction of a $180-million coal terminal in Beira, the southern African nation's second largest city.

CFM spokesman Antonio Libombo told Reuters that the talks with international financiers were progressing and that the terminal would be completed within two years. It would be able to handle 18 million tonnes of coal per year.

"We have already designed the engineering project and construction work will be concluded by 2009 according to the established time frame," Libombo said.

The construction of the terminal at Beira was spurred by the government's decision to allow the redevelopment of the Moatize coal mine in northern Tete province.

Extensively damaged during Mozambique's civil war in the 1970s and 1980s, Moatize is believed to hold about 2.4 billion tonnes of coal reserves, making it one of the largest untapped deposits in the southern hemisphere.

A consortium led by Brazilian iron ore producer Companhia Vale do Rio Doce (CVRD) won the rights to rehabilitate the mine in 2004.

It has said it expects to begin production in 2010, with estimated annual output of about 12 million tonnes of coal. Most of the production is expected to be exported through Beira.

Libombo said that CFM also planned to spend $175 million to build a railway line linking Beira port with other countries in the southern Africa region, including landlocked Zimbabwe, Malawi and Zambia.

Modernising Mozambique's ports and rail lines, which were badly damaged in a 17-year civil war that ended in 1992, is a key part of Mozambican President Armando Guebuza's efforts to boost foreign investment and trade.

The former Portuguese colony's fast-growing economy, still largely dependent on agriculture, has been handicapped by poor infrastructure, especially outside the capital Maputo.

China trade deal would benefit food sector, says minister

A trade agreement with China would benefit food and beverage companies in both countries, New Zealand's deputy prime minister Michael Cullen said yesterday.

Speaking at the China Executive Leadership Academy Pudong (CELAP) in Shanghai, Cullen tried to persuade the Chinese authorities to enter into a trade agreement, arguing that "there are substantial gains at stake for both our economies if we can complete a trade deal."

New Zealand, like many other Western economies, is trying to secure trade deal with Asian countries, fearing a loss of trade if developing nations with booming economies such as China look elsewhere.

Cullen argued that the food industry, in particular, would benefit, as five per cent of New Zealand food and drink exports are sold to China, which in turn provides 13 per cent of New Zealand imports, Cullen said.

"Our exporters benefited when China entered the World Trade Organisation in late 2001 and tariffs on a number of New Zealand products fell," he argued. "We also benefit from increased certainty of access as a result of China becoming part of a rules-based system."

China, on the other hand, has profited from New Zealand's thousand year old farming "heritage"; its farm policy and agricultural methods, he added.

According to the deputy prime minister, a globalised economy has opened the door to innovation and invention in New Zealand's food industry, paving the way for products that the country did not want to or could not manufacture fifty years earlier.

"A generation ago we didn't have a wine industry to speak of; now our sauvignon blancs and pinot noirs are world-leading," he said. "Our dairy companies are inventing high-nutrition sports drinks, while the horticulture sector is developing high value plant varieties like Zespri Gold kiwifruit and Jazz apples."

When pushing for a globalised food industry, Cullen argued that China and New Zealand-based food companies should work together because the two economies are "complementary", and would allow companies from both countries to grow.

As an example of how companies blossom within a free market, Cullen illustrated his speech by describing the expansion of Fonterra, one of New Zealand's, and now the world's, largest dairy company.

"Fonterra comprises a global supply chain that takes milk from its own shareholders' farms in New Zealand - and also from farms in other countries," he said. "The partnership benefits from the local expertise of Fonterra's partners, and those local partners benefit from Fonterra's technological expertise in the dairy field and global marketing experience."

New Zealand manufacturers would profit from China's innovative technology, Cullen suggested.

"Science and technology are crucial to transforming New Zealand's economy to a high-skill, high-value, globally-connected economy," he said.

Innovation is also key for growth, he said, and companies must adapt to different local tastes to do well.

For example, New Zealand meat manufacturers must not only sell legs of lamb to the UK, but also diced lamb in sauce, chilled and vacuum packed, perhaps served with a side-dish, to countries such as China.

According to the New Zealand Herald, there have been 14 rounds of negotiations between the two countries over recent years, and New Zealand Prime Minister Helen Clark has this month once again tried to persuade Chinese President Hu Jintao to enter into an agreement.

Clark told the newspaper that although there were still several issues to be discussed, such as the dairy industry, the ball was firmly in China's court.

"I think that they now need within their system to be thinking of what they want to be in the final deal and how far they can move," she said.

HK Actis International Investment (Group) Co Officially Settled in High-tech Area in Chongqing

Recently, Actis International Investment (Group) Development Ltd., another major foreign invested enterprise, and Shenzhen National Capital Source Holding Ltd. Jointly invested USD300m in establishing Chongqing Ying Lun Industrial Holding Ltd., a JV locating at Mars building in Chongqing high-tech Park. The initial capital for the newly founded Ying Lun Company was USD98m, mainly covering industrial investment, assets operation, restaurant service, cultural entertainment, etc.

Mitsubishi Heavy Industries joined Harbin Group to Win Order from China Nuclear Power Plant

As reported by Japanese Economic News on Sep. 28, Mitsubishi Heavy Industries, Ltd. will cooperate with China Harbin Group to enter Chinese market of nuclear energy equipment in full swing. It was known that two enterprises had won an agreement of JPY60b to JPY70b and would provide such equipment as turbine to Zhejiang San Men Nuclear Power project.

The news also pointed out that Mitsubishi Heavy Industries and Harbin Group were expected to acquire the building contract of Shandong Hai Yang Nuclear Power Plant. This order it estimated with equal amount to that of Zhejiang San Men.

It was estimated that the total amount of these two agreements would exceed JPY100b (USD865m).

French Lafarge Group Accelerated Investment Pace in Sichuan

Shuang Ma Cement Manufactory of Gong County, which was invested by Lafarge Rui An Company of Lafarge Group with RMB357m on Sep. 27, officially launched its first phase project with annual cement production of 1m tons. It was known that Lafarge would add over RMB200m investment here to enlarge annual production scale to 2.4m tons. This move indicated that Lafarge accelerated its investment pace in Sichuan Province during the "eleventh five".

Germany Sewing Equipment Enterprise Saw Business Opportunity in Upgrading Chinese Clothing Industry

As one of the traditional Chinese advantageous industries on export, Chinese clothing industry is taking a proactive stance in utilizing more advanced technology to lift its competitiveness in international market. Doubtlessly this upgrade is bringing good business opportunity to global sewing equipment enterprises. The ongoing 2007 China International Sewing Equipment Exhibition held in Shanghai provided direct accessibility to Chinese clients for global sewing and clothing technological enterprises. There were 19 German enterprises displayed on this exhibition. Among them 12 enterprises united as German national exhibition group, which was formed for the fourth consecutive year on such industrial notable exhibition by Germany, and the other 7 enterprises set up separate stands.

As introduced, the total export value of German clothing equipment in 2006 stood at EUR25.9m, almost 50% more than that of the previous year. China was the second largest export destination market, only after US.

China Became the Second Largest Investment Sourcing Country in Papua New Guinea

According to the statistics from Investment Promotion Bureau of Papua New Guinea, the total foreign investment attracted by Papua New Guinea in 2006 achieved 2.1b kina (approx USD700m). Among them 319.7m kina (about USD107m) was Chinese investment into Papua New Guinea, up by 1154% year-on-year. Hence China ascended to be the second largest source country investing in Papua New Guinea.

Australia maintained its first place in investing in Papua New Guinea with investment up to 379.7m kina (equal to USD127m), down by 57.27% year-on-year. Indonesia and Malaysia ranked the third and the fourth place respectively with investment of 310.4m kina (about USD103m) and 252.5m kina (approx USD84m).

Cnooc Parent, BP Seek Customers for China's First LNG Terminal

China National Offshore Oil Corp., the nation's largest offshore oil explorer, and partner BP Plc are seeking additional customers for their liquefied natural gas terminal in southern China.

"The facilities are operating at less than 50 percent utilization and ready to support further new and existing customer growth," Tomas M. King, president of Guangdong Dapeng LNG Co., the nation's first LNG import terminal, said in an e- mailed statement today.

The $900 million terminal in Guangdong province has a 25- year contract with Australia's North West Shelf project to receive about 3.7 million tons of LNG a year. China National Offshore owns a 33 percent stake in the terminal and BP has 30 percent. The plant's customers own the rest.

The terminal has received more than 45 LNG cargoes, a higher total than the original plan, since it started operating in May 2006, King said.

The terminal operators bought three spot Nigerian cargoes because domestic demand has outpaced contractual supplies from Australia, an official at the venture said yesterday, asking not to be identified because of company policy.

China National Offshore and BP are adding units at the Dapeng terminal to expand capacity in order to meet rising demand, Upstream reported today, citing BP China Holdings' senior vice president L.C. Hicks. They will install two extra open rack vaporizers, equipment that converts LNG into a gaseous state, by the end of next year, the newspaper said.

The project partners installed a third LNG tank earlier this month, expanding the terminal's storage capacity to 480,000 cubic meters from 320,000 cubic meters previously, they said in today's statement.

China, the world's largest energy user after the U.S., aims to expand the share of energy produced from gas to 5.3 percent by 2010 from 3 percent now to cut reliance on oil and coal. Chinese oil companies are planning for more than 10 LNG receiving terminals along the nation's eastern and northern coasts.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 259 Fahrenheit), for transportation by ship to destinations not connected by pipeline. On arrival, it is turned back into gas for distribution to power plants, factories and households.

China Buys Three Spot Nigerian LNG Cargoes to Meet Local Demand

China, the world's second-biggest energy user, bought three cargoes of Nigerian liquefied natural gas because domestic demand has outpaced contractual supplies from Australia.

China's only LNG import terminal, owned by China National Offshore Oil Corp. and BP Plc, received two Nigerian cargoes this month and may get another next week, a terminal official said, asking not to be named because of company rules. Royal Dutch Shell Plc's Galea will deliver a cargo to China on Oct. 5, according to transmissions from the ship captured by AISLive on Bloomberg. Shell is a partner in Nigeria LNG Ltd.

Imports climbed after China, the world's biggest emitter of greenhouse gases, turned to the cleaner-burning fuel to cut reliance on oil and coal. The terminal in southern Guangdong province has imported four spot cargoes for immediate delivery from Oman and Algeria between April and August to supplement long-term supplies from Australia's North West Shelf.

"There is great demand for the clean fuel here if the price is affordable," Rao Xiaozhu, vice chairman of Guangdong Gas Association, said by telephone, "Now most LNG is feeding power plants and city residents are all awaiting the fuel." The Guangdong Dapeng LNG Co. terminal supplies Guangdong, the nation's largest energy-consuming market.

China National will buy more LNG cargoes in the spot market to meet demand from power plants and city gas users, Ye Yishu, marketing general manager at the Beijing-based company's LNG trading and shipping unit, said June 27. The cargoes range between 55,000 and 60,000 metric tons.

Australian Supplies

The $900 million Guangdong Dapeng terminal gets most of its LNG from Australia's North West Shelf venture, which has a 25-year contract to supply 3.7 million tons a year. The venture is operated by Woodside Petroleum Ltd. and is one-sixth owned by BP Plc.

Prices for individual spot cargoes for immediate delivery are more than double the cost of long-term shipments. China bought its first spot LNG cargo from Oman in April at $435 a ton, or $8.30 per million British thermal units. In May, the country paid the North West Shelf Venture $164 a ton, or $3.15 a million British thermal units, for supplies under a term contract, customs data show.

China's share of Asia Pacific's LNG imports may more than double by 2030, Yonghun Jung, vice president of the Asia Pacific Energy Research Center, an affiliate of Japan's Institute of Energy Economics, said June 26. China may import 52 million tons of the fuel a year by 2030, accounting for 12 percent of the region's LNG shipments, he said then.

Asustek to put nine OEM units into two new firms

Taiwan's Asustek Computer, the world's top motherboard maker, Saturday unveiled a reorganization plan that will move nine of its contract manufacturing units into two new companies. The move was part of the firm's broader plan announced in July to split its contract manufacturing from its branded businesses.

Asustek will put eight units involved in PC-related original equipment manufacturing into a new company called Pegatron, the company said in a statement. Pegatron will issue common shares in exchange for the units' assets worth US$561.7 million. Asustek will also put another OEM unit, Casetek Holdings, into another new company called Unihan, focusing on casing, modules and non-PC goods. The spin-off will be effective in January next year.

Uni-President shares rise on report of China venture

Uni-President Enterprises Corp. shares rose to a record Saturday on a report Taiwan's biggest processed-food maker will take a stake in a Chinese company to make non-woven fabrics and hygiene paper. Uni-President gained 2.8 percent to NT$51.40 at the 1:30 p.m. close in Taipei Saturday, compared with a 0.7 percent rise in the benchmark Taiex index. The food maker will take a 25 percent stake in a venture with diaper and facial tissue maker Kang Na Hsiung Enterprise Co., the Economic Daily reported Saturday.

Kang Na will reportedly take a 75 percent stake in the venture. Its shares jumped 6.9 percent to NT$23.95.

China launches US$200 bil. investment fund

China's government formally launched a company Saturday to invest US$200 billion (euro141 billion) from its vast foreign reserves, creating one of the world's richest investment funds at a time of rising scrutiny of such state-run entities.

Financial analysts are watching to see where the new company invests and the impact on financial markets, especially demand for U.S. Treasury securities, in which Beijing holds a big share of its reserves.

Beijing announced plans for the fund in March in hopes of earning higher returns on its US$1.3 trillion (euro915 billion) in foreign reserves, which are the world's largest.

The China Investment Corp. will start out with US$200 billion (euro141 billion) in capital, the Xinhua News Agency said. Its chairman is Lou Jiwei, a deputy secretary-general of China's Cabinet and a former finance minister, Xinhua said. The general manager is Gao Xiqing, vice chairman of the agency that manages China's state pension and social welfare fund.

The fund is to operate independently and keep investment decisions separated from government policy, Xinhua said. The agency has yet to disclose its investment goals.

An official involved in creating the fund told The Associated Press in May it was likely to try to avoid causing political strains by buying minority stakes in companies abroad rather than pursuing outright takeovers.

Chinese companies have been uneasy about foreign acquisitions since an uproar in 2005 over state-owned oil company CNOOC Ltd.'s attempt to acquire U.S. oil and gas producer Unocal Corp. CNOOC dropped its bid after American critics said it might endanger energy security.

Some officials and economists want the new fund to finance foreign expansion by Chinese companies or buy oil and other resources needed by the country's booming economy.

The rapid growth of such sovereign wealth funds run by Asian and Middle Eastern governments has raised questions about their intentions and impact on financial markets.

The European Union might restrict investments by government funds unless they disclose more about what they invest in and why, the top EU economic official said this week.
"If they don't agree to these criteria, we can find good reasons to react in some cases," EU Economy Commissioner Joaquin Almunia told London's Financial Times in an interview.

China's investments have drawn special attention because of the country's large and growing economic and military might.

The new fund would dwarf foreign investment activity by Chinese companies, which spent US$21 billion (euro14.8 billion) abroad last year, according to the government.

On Friday, a group that includes China's biggest maker of network equipment, Huawei Technologies Co., announced it would pay US$2.2 billion (euro1.6 billion) to buy U.S. network gear supplier 3Com Corp. in a deal that could draw similar scrutiny. Huawei was founded by a former Chinese army officer and its early sales were to the military, but the company says most of its business now is with civilians.

Finance Minister Jin Renqing said in March that China's investment agency would be modeled in part on Singapore's government-owned Temasek Holdings, which invests in banks, real estate and other industries in China, India and elsewhere.

China currently holds its reserves in U.S. Treasury securities and other safe but low yielding instruments.

A key question about its new strategy has been the possible impact on the Treasury market. Chinese purchases have helped to finance the U.S. budget deficit, and Beijing has given no indication of how much money might be diverted to other assets. But lower Chinese demand could force Washington pay higher interest to attract buyers.

The new Chinese agency made its first deal even before it was formally launched, agreeing in May to pay US$3 billion (euro2.1 billion) for just under 10 percent of American investment firm Blackstone Group LP.

That investment has performed poorly, with Blackstone shares falling since an initial public offering in June.

Imports of gasoline hit 10-year high

CHINA'S imports of gasoline hit a ten-year high in August after the country's economic planner ordered state-owned oil firms to make up shortfalls in supply.

Imports reached 45,000 tons last month, up 7,896 percent from August last year.

Meanwhile, exports shrank to 257,000 tons, down 18.3 percent from August last year and down from 330,000 tons in July and 526,000 tons in June.

China has been a key gasoline exporter in Asia with small amounts of imports. It imported only 13.6 tons of gasoline in July.

Tian Chunrong, an analyst with the China Petrochemical Corporation (Sinopec Group), China's largest oil refiner, said the government order for a guaranteed domestic gasoline supply was the major reason for both the sharp rise in imports and the drastic drop in exports.

The National Development and Reform Commission, China's top economic planner, in early August required the China National Petroleum Corporation and the Sinopec Group, the two state-owed oil giants, to increase oil refining volume and reducing exports of refined oil products to ensure the domestic supply.

Chinese motorists would see no shortage of gasoline and the two oil giants were sending signals that domestic supply could be guaranteed by increasing imports and cutting exports, said Tian.

A supply shortage hit some gas stations in July mainly due to the price rises of crude oil in the international market.

Rising inflation risks restrained the government from raising prices of refined oil products, which were still under state control, despite record international oil prices since late June.

Refineries had to reduce output or raise the wholesale price, both contributing to the apparent shortage in the domestic market, said Tian.

Experts predicted that China would be a temporary gasoline importer and its imports could drop when the demand lessens.

China sees rapid growth in auto and auto parts export

During the first seven months of this year, China exported 12.62 billion US dollars worth of automobiles and parts, an increase of 47.8 percent year on year; and the value is approaching last year's figure, according to statistics from the Ministry of Commerce.

This includes 8.85 billion dollars of parts exports, up 32.4 percent. There were 294,000 vehicles exported, an increase of 70.3 percent; and the entire-year figure will reach above 500,000.

China has become the world's second largest auto consumer, the third largest producer, and the primary potential market. In addition, auto exports have entered a stage of fast growth, according to Commerce Minister Bo Xilai.

At the second national conference on auto product exports, Hefei, Guangzhou, Baoding and Liuzhou were identified as the second batch of state-level auto and auto parts export bases which – together with the first-batch of eight cities including Changchun and Shanghai – brings the total number of China's auto export bases to 12.

The second batch of bases carries independent brands and innovation. The rise of domestic brands has become a highlight in China's auto industry. According to Li Chunbo, chief analyst on the auto industry from CITIC Securities, the export of Chinese-brand commercial vehicles has grown rapidly in recent years; and Yutong, King Long, and Sinotruk have exported more than 10 percent of production and sales.

China to build deep water oil exploration fleet

China will build its own deep water oil exploration fleet in three to four years. The fleet will be able to work in deep waters all over the world, except for the north pole.

China's Offshore Oil Company has launched the strategy for building such a fleet. The company's spokesman, Liu Junshan, said one of their future targets would be deep sea oil exploration. They will invest up to ten billion yuan in the construction of modern equipment for deep sea drilling, a laboratory, and a working fleet.

LNG cold energy project kicks off

Construction of the country's first air-separation project that uses LNG cold energy kicked off in Fujian Province yesterday.

The project is a joint venture between Air Products Inc and CNOOC Oil Base Group Ltd, a wholly owned subsidiary of China National Offshore Oil Corporation (CNOOC), the country's top offshore oil company.

The joint venture will build and operate an air-separation unit (ASU) and liquefier in Putian of Fujian Province, to produce liquid oxygen, nitrogen and argon by using cold energy from liquefied natural gas (LNG).

It is the first application of cold energy from LNG at an ASU plant in China.

"The project is one of CNOOC's key efforts to enhance energy efficiency and protect the environment. And making use of cold energy from LNG is strategically important," Meng Liming, general manager of CNOOC Oil Base Group Ltd, said on Friday.

Meng called for CNOOC to build the facility and to further develop other LNG cold energy projects by strengthening research and development in the area.

The joint venture will also build and operate associated storage and distribution operations at the ASU plant to supply liquid products to the local market in Fujian Province, a fast-growing marketplace for industrial gases, according to Air Products.

With a total investment of 300 million yuan, the project will come onstream in the first half of 2009.

It will be able to produce 300 tons of liquid oxygen, 300 tons of nitrogen and 10 tons of argon per day.

The country's energy efficiency and environmental protection push has seen companies like CNOOC shift focus to the development of clean fuels such as LNG.

Construction begins on Tibet's biggest logistics center

Authorities in Tibet started building the region's biggest logistics center on Friday in a bid to further exploit the potential of the Qinghai-Tibet Railway that opened a year ago and boost the region's economic development.

The logistics center, covering 533 hectares, is located next to a railway station at an altitude of 4,500 meters in Nagqu Township of Nagqu County in northern Tibet.

It is scheduled to be finished within 15 months, costing almost1.5 billion yuan (200 million U.S. dollars), according to Hao Peng, executive vice chairman of the Tibet Autonomous Region.

The center is expected to handle 2.23 million tons of cargo by 2015 and 3.1 million by 2020, including raw minerals, local herbs, construction materials and commodity goods.

"The northern part of Tibet is rich in natural resources, and the Nagqu logistics center will provide easier access to the resources, which will drive the industrial development and trade in the area and raise its self-development capabilities," said Lu Chunfang, vice minister of railways, at Friday's inauguration ceremony.

Dunzhu, a local herdsman, told Xinhua that she supported the idea.

"To me, it means that I have access to more commodity goods my family needs, and easier ways to sell our dairy goods," she said.

The 1,956-km-long Qinghai-Tibet Railway opened on July 1 last year has linked Tibet with the rest of China by train for the first time.

Tibet's gross domestic product (GDP) posted a 14.7-percent growth to reach 14 billion yuan (1.84 billion U.S. dollars) in the first half of this year, the highest over the past decade, according to the Tibet Regional Statistics Bureau.

Thanks to the opening of the Qinghai-Tibet Railway, the tertiary industry, which features the consumption market and service industry, has developed fast in the past year, the bureau said.

New coal terminal at Newcastle gains final approval

Newcastle's new coal terminal cleared its final hurdle Wednesday, with Peter Costello giving the project foreign investment approval.

The $922 million facility, which received planning approval from the NSW Labor Government in April, will begin loading coal in 2010 and will eventually increase the Port of Newcastle's capacity from about 100 million tonnes of coal a year to more than 150 million tonnes. Foreign investment approval was needed because the consortium building the loader, Newcastle Coal Infrastructure Group, includes one partner, Peabody, that is based in the US.

There are coal ships - sometimes as many as 50 vessels - waiting to be loaded off Newcastle, according to reports. The queues can cost coal companies as much as $5 million a week in "demurrage" fees, the levy paid to shipping companies when ships are detained.

The new coal loader will be built on Newcastle's Kooragang Island.

It is estimated it will boost Australia's coal exports, currently worth about $25 billion each year, by a further $1 billion, and create 5000 jobs across NSW.

China's freeway to Australia's Fine Food

Austrade, the Australian Government's export development agency brought over 250 buyers from around the world to Fine Food Australia on 24 September-and the most interest has been from China, with over 70 buyers attending.

Austrade's Beijing-based Country Manager, Peter Osborne said the China buyers were exposed to a wide range of Australian food and beverage products with 800 businesses participating in Fine Food this year.

"The interest in Australia is partly driven by China's growing middle class and urbanisation including a massive expansion of the country's freeway and railway network," Mr Osborne said.

"The opening up of inland China is underway. By 2035, every city with a population of over 200,000 will be connected.

"And by 2020, over 60 per cent of the Chinese population will be living in urban centres which will be significant markets in their own right. Already there's a rapid expansion in wholesale markets and retail outlets-a good place for Australian companies to play.

"There are a range of foreign-funded retail outlets such as Wal-mart, Trust-Mart, Makro, Jusco, Carrefour, Park'N Shop, 7-Eleven, Watson's and major domestic chain store outlets all expanding into China with outstanding speed. These supermarkets offer local customers an increased range of imported foods and beverages," he said.

Austrade Business Development Managers from five different Austrade China offices (Guangzhou, Shenzhen, Chengdu, Shanghai, Kunming) in Australia accompanied the Chinese buyers in Australia for Fine Food.

Mr Osborne said the buyers had been introduced to Australian exhibitors and exporters targeting the Chinese markets.

"Among the products in demand are Australian wine, seafood, dairy and dry grocery products such as snacks, confectionary, biscuits and cereals," he said.

Over the past 12 months there's been an increase of over 20 per cent in Australia's export trade to China. Mr Osborne said these figures prove China is an increasingly important market to target.

"It's imperative that Australian food and beverage producers get involved in trade events and get their business on the radar in China," he said.

"In addition to Fine Food Australia, Austrade's China team is working hard to bring an Australian showcase to China and is supporting an Australian National Pavilion at the Food Hospitality China (FHC) expo in Shanghai from 14-16 November 2007. Already more than 20 Australian food and wine companies have signed up to exhibit at FHC in the Australian stand.

"The FHC show is a reputable food and beverage event in China with a strong following amongst food service and retail customers. International exhibitors take advantage of FHC's trade visitors which come from all over China and the nearby regions to source new suppliers and products. For example, this year's FHC has over 100 Spanish exhibitors alone.

"Given the incredible rise in exports of Australian wine to China, Australian wine will be a feature at the Australian showcase at FHC. The Australian Wine Gold Card Day event at FHC Shanghai will showcase Australian premium wines, and Austrade and the Australian Wine and Brandy Corporation will bring wine master classes featuring Jeremy Oliver. Jeremy Oliver will also launch Chinese names of the four wine categories," Mr Osborne said.

Nokia adding WiMax support to products next year

Nokia Corp. plans to add WiMax connectivity to its N-series Internet tablet next year, the company said Wednesday.

WiMax is a wide-area networking technology that offers faster download speeds than 3G (third-generation) mobile networks and has a wider range than Wi-Fi. Adding WiMax support to the Internet tablets will allow users to surf the Web or make calls using Skype Ltd. away from Wi-Fi hotspots.

Nokia's current Internet tablet, the N800, has a wide screen display with a resolution of 800 pixels by 480 pixels. The device comes with Wi-Fi and Bluetooth 2.0. The N800 does include support for cellular networks, although Bluetooth can be used to connect with a cellular phone.

Nokia's Internet tablets, which run a version of the Linux operating system, will use Intel Corp.'s Broad Peak WiMax chipset, the same chip that will be used inside upcoming Centrino laptops that support WiMax.

Due during the second half of 2008, Centrino laptops with WiMax support will be available from Asustek Computer Inc., Acer Inc., Lenovo Group Ltd., Toshiba Corp. and Matsushita Electric Industrial Co. Ltd., which sells laptops under the Panasonic brand.

Nokia said Internet tablets with WiMax will be available in the U.S. and can be used with Sprint Nextel Corp.'s WiMax network. Information on Nokia's plans to sell WiMax devices outside the U.S. was not immediately available.

China, Russia agree to improve trade, investment

China and Russia agreed Friday to improve the trade structure, expand investment and technological cooperation in line with the principle of reciprocity.

Chinese Vice Premier Wu Yi and her Russian counterpart Alexander Zhukov held a meeting in Hangzhou, capital of east China's Zhejiang Province, to prepare for the regular meeting between the prime ministers due to be held in Moscow in November.

Wu said Sino-Russian strategic and cooperative partnership had stepped into the second decade. The bilateral trade had exceeded 30 billion US dollars in the first eight months and could reach record high at the end of the year.

She said the two countries had improved the trade structure and cooperation on energy resources, nuclear power, science and environmental protection had made remarkable achievement.

She particularly mentioned the two countries should speed up the cooperation on infrastructure and wood intensive processing.

Alexander Zhukov said "the Year of China" in Russia had enhanced the cooperation in all fields, the trade between the two countries had increased and enterprises cooperation had been vigorous.

He said Russia would hold the Winter Olympic Game in 2014 and the Asia-Pacific Economic Cooperation meeting in 2012, and this would bring about rare chance for economic cooperation between Russia and China.

He hoped the two sides would expand machinery and electronic product trade, and strengthen the infrastructure construction of the port and the border trade.

After the meeting, the two sides signed an agreement on establishing a trade council on machinery and electronic product.

Gasoline Imports Of China Jumps In August

From just 13.6 tons in July, China's gasoline imports jumped to 45,000 tons in August, a 7,896-percent increase.

The sharp rise in gasoline imports was attributed to the government's order in early August for state-owned refiners to ensure domestic gasoline supply.

The National Development and Reform Commission, China's top economic planner, also required the China National Petroleum Corp. and the Sinopec Group to increase oil refining volume and cut exports of refined oil products.

The two oil refiners exported 257,000 tons of gasoline in August, 18.3 percent less than exports in August 2006. The volume is also lesser than the 330,000 tons of gasoline they exported in July.

Tarim Oilfield to produce 15.7 billion cubic meters of natural gas this year

Tarim Oilfield, a major oilfield of PetroChina in northwestern China's Xinjiang Uygur Autonomous Region will produce 15.7 billion cubic meters of natural gas this year, up 4.7 billion cubic meters year on year, according to an official of Tarim Oilfield.

The oilfield has formed an annual gas transmission capacity of 15 billion cubic meters. Tarim Basin is the starting point of China's 4,200-kilometer-long west-east gas transmission project, which, with a designed gas transmission capacity of 12 billion cubic meters, has supplied natural gas to more than 80 large and mid-size cities in central and eastern China.

The newly-operating Yingmaili gas field developed by Tarim Oilfield is expected to become the second largest west-east gas supplier. With verified geological gas reserves of 65.6 billion cubic meters, it began to supply natural gas in April 2007.

Covered an area of 560,000 square kilometers, Tarim Basin has an estimated natural gas reserve of 10 trillion cubic meters. It produced 6.05 million tons of crude and 11 billion cubic meters of natural gas in 2006, with the oil and gas output equivalent breaking 15 million tons, ranking third among PetroChina's subsidiaries.

Statoil, PetroChina to Ink Deal on China Oil Field in October

Norway's Statoil ASA (STO) will sign its first deal with PetroChina Co. (PTR) to develop an oil field in northeastern China with geological reserves of more than 733 million barrels, an industry person familiar with the deal said Friday.

The deal, which may be signed in late October, will ensure Statoil has a continuing presence in exploration and production in China when its Liufeng 22-1 field in the South China Sea is exhausted. Statoil has a production sharing contract with Cnooc Ltd. (CEO) for Liufeng.

Under the terms of the deal, Statoil will work to raise oil output at the Fuyu oil field in Jilin province, which PetroChina started to develop in 1959.

According to a posting in March on the Web site of PetroChina's parent company, China National Petroleum Corp., only 25% of reserves at the Fuyu field had been tapped by 2002 and this recovery rate could be increased to 35% or more if advanced technology is used.

The field's oil production was 950,000 metric tons last year, equivalent to 19,078 barrels a day.

"Statoil will use its expertise in using carbon dioxide injection to develop thick oil reserves in the field," the person said.

When contacted by Dow Jones Newswires, PetroChina spokesman Mao Zefeng declined to comment. Statoil spokeswoman Rannveig Stangeland said the company wouldn't comment on rumors regarding a potential signing.

China's rapidly growing energy consumption is leading PetroChina and its main domestic rival China Petroleum & Chemical Corp. (0386.HK), known as Sinopec, to open up the country's onshore oil and natural gas sector to foreign companies, especially fields with complex geology.

PetroChina currently uses polymer and steam injection at fields in the northeast to boost oil recovery, but industry insiders say CO2 injection is more effective.

CO2 injection is also attractive to China due to the dominance of coal in the national energy mix and the large volumes of the greenhouse gas currently emitted by coal-fired power stations into the atmosphere.

In September 2006, CNPC signed a deal with United Petroleum Natural Gas Investments Ltd. for enhanced oil recovery at the Gaosheng block of northern China's Bohai Basin. Earlier this month, Hong Kong-based Enviro Energy said it had bought a 50% stake in a PetroChina-owned block in Jilin and aims to use new technology to raise production there.

Statoil has repeatedly tried to forge alliances with PetroChina for upstream projects, but has lost out to rivals in international tenders.

Most recently it was beaten by U.S. oil major Chevron Corp. (CVX) for the right to help develop PetroChina's high-sulfur Luojiazhai gas field in the southwestern province of Sichuan, which contains a prolific basin in terms of major gas discoveries.

Statoil also sought a contract for the South Sulige Block in the gas-rich Ordos Basin in northern China's Inner Mongolia region last year, but France's Total S.A. (TOT) was selected by PetroChina to be its partner instead.

However, Statoil and CNPC signaled their willingness to do business earlier this year when they signed a memorandum of understanding forging a strategic partnership. Exact details on the types of projects being considered were unavailable at the time.

Speaking at a conference in April, Kristen Kjeldstad, managing director of Statoil's China unit in Shekou, said Statoil and CNPC were discussing swapping stakes in some Norwegian oil and gas fields for assets in China.

Kjeldstad said the two sides were discussing "concrete proposals" and the catalyst was the merger of Statoil with Norwegian rival Norsk Hydro ASA's (NHY) oil and gas assets in a $30 billion deal due to complete Monday.

The new company will be called StatoilHydro and will have a daily production output of around 1.7 million barrels of oil equivalent a day.

Kjeldstad said that in order to meet the requirements of Norwegian regulators, Statoil would likely offer a portion of the enlarged company's interests to CNPC and that this was already being discussed.

Buffett Reduces Stake in PetroChina for Fourth Time

Warren Buffett's Berkshire Hathaway Inc. sold PetroChina Co. shares for the fourth time in three months, banking an almost sevenfold gain since the U.S. billionaire first invested in China's largest oil producer.

Berkshire sold 45.138 million shares at an average HK$11.26 each on Sept. 13, a Hong Kong stock exchange filing today showed. That cut its stake to 7.99 percent of the stock not controlled by the Chinese government from 8.93 percent. The company remains the largest non-government shareholder.

The $65.5 million from the latest sale brings to $272 million the value of Buffett's PetroChina sales. Berkshire bought its stake in the Beijing-based producer for less than HK$1.70 a share in April 2003. Activists have urged Buffett and other investors to divest PetroChina holdings over links to Sudan, whose government the U.S. accuses of supporting genocide.

PetroChina is controlled by state-owned China National Petroleum Corp., which has developed Sudanese oil fields since 1996. In Sudan, 200,000 people have died and 2 million more are homeless because of conflict in the African nation's western Darfur region.

The Save Darfur Coalition on Sept. 5 called on funds including Fidelity Investments, Vanguard Group and American Funds to sell their PetroChina stakes. Buffett has said his actions would have no effect on PetroChina, its parent or the Chinese government. Buffett, through spokeswoman Jackie Wilson, declined to comment on his latest sale.

Range of Businesses

The 77-year-old investor built Berkshire, based in Omaha, Nebraska, over four decades from a failing textile manufacturer into a $181 billion investment and holding company with businesses ranging from candy making and insurance to corporate- jet leasing.

Berkshire's PetroChina stake, worth about $3.3 billion at the end of last year, was equal to about 1.1 percent of the company's entire capital. Buffett paid $488 million for the shares in 2003, according to Berkshire's annual report.

Buffett last reduced his stake on Sept. 6, selling 28 million shares for HK$11.47 apiece. In August, he sold 92.66 million shares for HK$1.1 billion at an average of HK$11.473. He sold 16.9 million shares in July, booking HK$210 million at an average of HK$12.441 a share.

PetroChina shares climbed 4.8 percent to a record HK$14.74 by the market's close today. The stock has gained 30 percent from the closing level on the day of Buffett's latest sale.

Buffett's next investment may be a 20 percent stake in Bear Stearns Cos., according to a Sept. 26 article by the New York Times that cited unidentified people. Shares of New York-based Bear Stearns, the fifth-largest U.S. securities firm, jumped 7.7 percent to $123 that day. Buffett declined to comment on the report.

China completes delivery of 50,000 tons of fuel oil to N.Korea

China has completed the delivery of 50,000 metric tons of fuel oil to North Korea, a Chinese Foreign Ministry spokesperson said Thursday.

Fuel supplies were a condition for Pyongyang to begin implementing measures as part of the first stage of its denuclearization.

Six nations engaged in protracted talks on North Korea's nuclear disarmament gathered for a new round of negotiations in the Chinese capital Thursday after a six-month break.

Envoys from the United States, China, Russia, Japan and South and North Koreas are expected to finalize a timeline for Pyongyang to shut down all its nuclear facilities and provide full data on its nuclear programs in exchange for aid and diplomatic incentives.

This would be the second phase of disarmament since the North closed its main nuclear reactor in July under the February six-party deal.

On Thursday, the first day of talks due to last until Sunday, the heads of the five working groups set up to encourage Pyongyang to give up its nuclear ambitions reported the outcomes of discussions held in August-September, a source close to the negotiations said.

The talks are taking place against the backdrop of suspicions that Pyongyang is providing nuclear technology to other countries. Media reports have said Israeli aircraft could target a joint Syrian-North Korea nuclear facility in Syria. Both Syria and North Korea have denied the reports. Israel has not given any official confirmation.

The disarmament talks have continued for over three years. North Korea successfully conducted nuclear bomb tests last October.

Puda Coal's Chairman and CEO Elected Vice Chairman of Shanxi

Puda Coal, Inc. (OTC Bulletin Board: PUDC) ("Puda Coal" or "the Company"), a leading supplier of China's high grade metallurgical coking coal used to make coke for the purposes of steel manufacturing, today announced the its Chairman and Chief Executive Officer, Mr. Zhao Ming, has been elected to serve as Vice Chairman of Shanxi Chamber of Commerce in the Tenth Assembly of Member Representatives.

Shanxi Chamber of Commerce is organized to foster an economic environment that encourages the growth of responsible private and non state-owned enterprises. Puda Coal is a recognized leader in Shanxi province for its highly-efficient production processes, environmentally-friendly coal washing facilities and positive influence on Shanxi's coal industry.

"I am honored to be elected as the Vice Chairman of The Tenth Chamber of Commerce and Industry and to be recognized for the many contributions Puda Coal has made to Shanxi Province," stated Mr. Zhao Ming. "I am committed to fulfilling the goals of this organization and will work with other industry elite to promote an economic and legislative environment that encourages the development of responsible private enterprise."

About Puda Coal, Inc.

Puda Coal, through its affiliates and controlled entities, supplies premium grade coking coal to the steel making industry for use in making coke. The Company currently possesses 3.5 million metric tons of annual coking coal cleaning capacity, and management believes it is the largest coking coal cleaning company in terms of capacity in Shanxi Province, China. Shanxi Province provides 20 - 25% of China's coal output and supplies nearly 50% of China's coke.

FORWARD-LOOKING STATEMENTS

The information contained herein includes forward-looking statements within the meaning of federal securities laws. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. Actual results could differ materially from those projected in the forward looking statements as a result of a number of risks and uncertainties, including but not limited to limited amount of resources devoted to expanding its business plan, failure to implement its business plan within the time period originally planned to accomplish; and other risks that are discussed in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Japan's Mitsubishi Heavy enters Chinese nuclear power market

Japan's Mitsubishi Heavy Industries is making a full-scale entry into China's growing market for nuclear power generation as it has won a major order there, the company said Friday.

China's demand for nuclear power generation is increasing as the booming economy consumes more and more energy but needs to curtail air pollution.

Mitsubishi Heavy Industries Ltd. has won an order from Sanmen Nuclear Power Co. Ltd. of China to supply two turbines, two generators and other equipment to a plant to be built in Zhejiang province along the East China Sea.

The Japanese firm has teamed up with major Chinese heavy machinery maker Harbin Power Equipment Co. Ltd. for the contract. The plant's reactors were set to be supplied by US-based Westinghouse, which is in Japan's Toshiba group.

Mitsubishi Heavy did not disclose the value of the contract but industry sources estimated it at 60 to 70 billion yen (520 to 600 million dollars).

The company is also in talks on providing another set of turbines and other peripheral equipment to the Haiyang nuclear power plant, to be built in northern Shandong province.

"It is true that we are holding negotiations but the deal is yet to be finalised," a spokesman for Mitsubishi Heavy said.

The Nikkei economic daily said the combined value of the Sanmen and Haiyang deals would exceed 100 billion yen.

Companies from other nations are also aiming for a slice of the Chinese nuclear market, with France's Areva currently trying to confirm a major order to build reactors.

Mitsubishi Heavy shares on the Tokyo Stock Exchange rose 14 yen or 1.90 percent to 751 yen on Friday, despite a slip in the benchmark Nikkei-225 index.

China Mines CBM Research in Race for Cleaner Fuel Source

China has set up a new coal-bed methane research center in Beijing in a bid to quicken development of the cleaner-burning fuel, PetroChina's parent said in an online newsletter yesterday.

The center, opened on Wednesday, is co-invested by PetroChina Co and Sinopec Corp, the nation's two largest oil and gas producers, as well as several other firms and a university, China National Petroleum Corp said.

This came just days after China ended an exclusive right for China United Coalbed Methane Corp by which it can partner foreign firms in CBM exploration, highlighting the government's effort to accelerate development in the sector.

CBM is a natural gas extracted from coal seams. China boasts CBM reserves of about 37 trillion cubic meters, ranking the third after Russia and Canada and close to the nation's conventional gas reserves. But due to lack of expertise in harvest the fuel, more than 1.3 billion cubic meters of CBM is emitted each year without being harnessed and is thereby wasted, according to a Merrill Lynch report.

The release of the flammable gas to the atmosphere, in order to avoid explosion risks in mines however, could also contribute to global warming.

"We plan to work out two to three core technologies in the CBM industry in three years," CNPC said of the vision of the new center.

China plans to produce 10 billion cubic meters of CBM by 2010, or 10 percent of its gas consumption. China produced 1.4 billion cubic meters by the end of 2006, or three percent of gas use.

China United is a venture between PetroChina and China National Coal Group. The end of its exclusive right means more qualified firms could tap the market by partnering foreign companies.

But an industry official warned the rule change could lead to lower efficiency and higher cost as "China's coal firms, which are closer to CBM resources, and oil firms, which are more sophisticated in drilling, probably will choose their respective foreign partners rather than join hands together."

China Digital rises on country's TV boom

China Digital TV Holding Co. is luring investors to its initial public offering by promising to capitalize on the potentially explosive growth of digital television in China.

'There's a hunger for Chinese companies that are leaders in their markets,' said IPODesktop.com President Francis Gaskins. 'The lake is rising and the boat is rising with it.'

China currently has the largest television viewing market in the world with TVs in 362 million households, according to data supplied by Analysys International. At the end of 2006, 139 million households subscribed to cable television, the research company said.

China Digital develops conditional access systems, which allow digital television network operators to control their subscribers' content and services, such as on-demand viewing and pay-per-channel programming.

As of June 30, China Digital had installed its CA systems at 130 digital television network operators.

On top of the huge numbers of television watchers in China, the company is also benefiting from the Chinese government's push for digital transmission. The government has required television network operators to switch from analog to digital by 2015.

'We are a primary beneficiary of this transition because CA systems are an essential component of any pay-television platform,' China Digital said in its prospectus.

Matthew Molberger, an analyst with Renaissance Capital, said the government mandate points to 'huge growth potential.'

IPO Financial Network President David Menlow said investors will also like the company's fundamentals. 'Here's a company running on some pretty fat net margins with a growth curve that looks extremely solid,' Menlow said. 'There's no hesitation at this point that the deal is going to be attractive.'

In the six months ended June 30, China Digital more than tripled its profit to $12.2 million, from $3.4 million in the year-ago period. The company's revenue more than doubled to $21.7 million from $10.4 million in the first half of 2006.

Meanwhile, China Digital's net margin expanded to 56.4 percent in the first half of 2007, compared with 33 percent in the same period of 2006. Gross margin totaled 81.9 percent in the first half of 2007.

Gaskins noted that growth slowed on a sequential basis over the past four quarters, which could raise questions with some investors. 'What you look for in these companies is sequential quarter-to-quarter growth in top line revenue,' he said.

Molberger downplayed the trend. He said fourth-quarter revenue was hurt by the shift of some revenues into the first quarter, and that the first quarter is seasonally weak due to the Chinese New Year.

On top of the fundamentals, Molberger said the offering price will appeal to investors.

The Beijing-based company expects the IPO, which totals 12 million American Depositary shares, to price between $11 and $13 per ADS. Each ADS represents one ordinary share.

The company has granted the underwriters the option to purchase up to an additional 1.8 million ADSs to cover any overallotments.

'The principal reasons for this offering are to create a public market for our ordinary shares for the benefit of all shareholders, to retain talented employees by providing them with equity incentives in a public company, to promote our corporate brand and image and to raise capital,' China Digital said in its prospectus.

The company plans to use proceeds from the IPO, which are estimated at about $131 million, for research and development, sales and marketing, acquisitions and general corporate purposes.

Morgan Stanley and Credit Suisse Securities are serving as the IPO's lead underwriters. Piper Jaffray, CIBC World Markets and Needham & Co. are also underwriting the offering.

China Digital plans to list its shares on the New York Stock Exchange under the symbol 'STV.'

Oil price rally, succumbs to selling

OIL futures fell yesterday as a late flurry of selling overcame an earlier rally driven by the steadily weakening dollar.

Early in the day, crude prices rose to near record levels as the dollar's drop against other currencies sparked buying by investment funds. But in the midst of that rally, analysts noted that oil's fundamentals are weak. Many believe it is only a matter of time before oil begins a seasonal price decline.

Light, sweet crude for November delivery fell $1.22 to settle at $81.66 a barrel on the Nymex, giving back nearly half of the $2.58 the contract gained on Thursday. Prices rose as high as $83.76 early in the day.

Oil prices peaked at a record $83.90 last week before retreating below $80 a barrel early this week. When an Energy Department report on Wednesday showed crude inventories rose last week, countering expectations for a decline, prices fell below $79 _ but then rebounded late in the day.

"There's definitely been a flow of fund buying here," said Tim Evans, an analyst at Citigroup Inc. in New York.

Oil and other commodities denominated in dollars are actually falling in price in the eyes of foreign investors. That's because the dollar has been sliding against other currencies since the Federal Reserve cut interest rates last week. The dollar fell further yesterday on expectations that the weak U.S. economy means another rate cut is coming.

Buying by foreign investors precipitates new investment by domestic traders betting the added demand will boost prices.

But Evans and other analysts argue that market fundamentals do not support such high prices. Oil inventories are falling, but that's typical for this time of year, Evans said. Oil inventories are 1.3 percent below year-ago levels, but oil's price is more than $20 a barrel higher, he said. And high oil and gas prices are depressing demand, Evans added.

Stephen Schork, an analyst and trader in Villanova, Pennsylvania, argued that many funds bought oil futures this week to pad their results for the third quarter, which ends yesterday.

"Hedge fund managers ... went window shopping in the (New York Mercantile Exchange crude) pit to dress up their end-of-quarter marks," Schork said in his daily Schork Report research note. "We are more interested to see how the fourth quarter begins on Monday rather than how the third quarter ends today."

While Nymex crude rallied late in the week, oil prices ended the week flat, up just 4 cents from last Friday.

Other energy futures have followed oil's advance only sporadically. When oil futures surged Thursday, gasoline and heating oil followed suit, adding more than 6 cents each. Yesterday, however, October gasoline fell 2.56 cents to settle at $2.0683 a gallon and heating oil fell 1.42 cents to settle at $2.2379 a gallon. Gasoline futures fell 4.62 cents, or 2.2 percent, this week. Heating oil and gasoline futures expired yesterday at the end of the Nymex floor session. Inventories of both grew more than expected last week.

Natural gas for November fell 4.9 cents to settle at $6.87 per 1,000 cubic feet. The government reported Thursday that natural gas inventories grew slightly more than expected last week.

In London, November Brent crude fell 86 cents to settle at $79.17 a barrel on the ICE Futures exchange.

State forex investment company debuts

China Investment Corporation (CIC), the country's $200 billion sovereign wealth fund, formally started operation on Saturday as policymakers seek to diversify its $1.41 trillion worth foreign exchange reserves.

The new company will have Lou Jiwei, vice general secretary of the State Council and former vice finance minister, to act as chairman of the board of directors and Gao Xiqing, former deputy chairman at the National Council for Social Security Fund, as general manager, according to a statement released at the opening ceremony in Beijing.

Hu Huaibang, former secretary of the commission for disciplinary inspection of the China Banking Regulatory Commission, is the new agency's chairman of the board of supervisors.

Other major members of the company's management are also from government ministries.

One of the largest State-owned funds in the world, the new agency has aroused suspicions about its projected overseas investment, but chairman Lou said at the opening ceremony that it will operate in a transparent manner and stick to the principle of "commercial operation" independent of the government.

"We will adopt a prudent accounting system ... adhere to commercial lines and improve the transparent on the condition that company interest will not be jeopardized."

The investment by the company will be long-term and aimed to maximize the returns from investment with acceptable risks.

It said it will focus its overseas investments mainly on portfolio of financial products.

The launch of the investment company is necessary, as the country has accumulated $1.41 trillion foreign exchange reserves, said Liu Xiahui, economist with the Chinese Academy of Social Sciences. But it will face major challenges, such as protectionism from foreign countries, he said.

"The political pressure from them will be huge," he said, pointing out that some countries may fear the huge fund will raise prices in overseas markets.

The company will abide by laws and regulations where it invests as well as international practice, Lou said.

Foreign, private companies top output

Foreign and private investors now contribute more than half of China's industrial output, the statistics bureau said yesterday.

Relaxed ownership rules in the manufacturing sector led to foreign and private factories contributing 53 percent of last year's industrial revenue, according to a National Bureau of Statistics (NBS) report released yesterday. The figure was 41 percent in 2002.

Industry is the backbone of China's fast-paced economy, despite the government's efforts to develop the country's agricultural and service sectors. In 2006, 43 percent of China's gross domestic product came from industrial expansion.

While it's seen rapid and stable growth in the industrial sectors, China has restructured its economy to increase the weight of its service sector. By 2006, the service industry accounted for 40.1 percent of the economy.

Industrial companies with foreign backing accounted for 31.5 percent of China's industrial revenue last year, up from 29.3 percent in 2002.

Measures to encourage the development of the private economy in recent years have seen private firms' industrial output increase at a faster pace. Private companies' contribution to China's industrial output increased from 10.7 percent in 2002 to 21.2 percent in 2006.

But the NBS report said yesterday that State-owned enterprises (SOEs) still play an important role in the sectors that are important to the country's economic security. For example, SOEs accounted for nearly 99 percent of economic output in the oil and natural gas exploration sectors, and the figure is 90 percent for the electricity industry.

Increased investment has also seen the number of companies with annual revenue higher than 2 million yuan increase from 120,000 in 2002 to 300,000 last year, according to the report. It said foreign and private investors own 70 percent of the country's 300,000 industrial firms.

The number of SOEs affiliated to the central government has dropped to 155 from 196 since restructuring began in 2003.

The State-owned Assets Supervision and Administration Commission (SASAC) plans to cut the number of major companies under its control from 155 to between 80 and 100 by 2010. But Xinhua quoted SASAC researcher Wang Zhigang as saying the goal will be met by the end of next year itself.

The central government will also focus on developing 30 to 50 companies to better compete with foreign firms, Li Rongrong, minister of the SASAC, said recently.

He also said the companies under his supervision will concentrate on strategic industries like the military, electricity, petroleum and chemicals, telecom, coal, civil aviation and shipping.

"So far, SOEs have achieved a satisfactory performance in meeting the government's economic development goals," said Li, commenting on the role of the State assets regulator, which was set up in 2003 to take control of big SOEs by promoting mergers and acquisitions and allowing poorly performing State firms to go bankrupt.

Performance this year

China's industrial firms reported 1.56 trillion yuan of profits in the first eight months of this year, up 37 percent from a year earlier.

Profits of State-owned enterprises rose 31 percent to 680.1 billion yuan, while collective and foreign-funded firms posted 39.3 billion yuan and 418.4 billion yuan. Private companies' profits hit 260 billion yuan, up 48.5 percent compared with the same period last year.

Booming growth was primarily driven by soaring profits in sectors like steel, building materials and transport equipment, according to the NBS.

Steel firms saw their profits rise 58.9 percent from the same period last year, while profits of building material companies surged 64 percent and that of transport equipment makers went up 66.5 percent.

Lin Yueqin, a researcher with the Chinese Academy of Social Sciences, attributed rapid profit growth to the continued expansion of China's economy over the past few years.
"We have been gathering steam since 2003 and solid economic expansion has ensured profit increases," Lin told China Daily.

The economy has expanded at an average of 10.4 percent over the past four years - more than double the average growth rate of the world economy during the same period.

He said the fast growth has brought considerable improvement in the income and living standards of both rural and urban regions.

"This has sped up demand, and that in turn has accelerated industrial development," said Lin.

GE, Wuhan in green steel deal

Wuhan Iron and Steel (Group) Co (WISCO) plans to cooperate with General Electric (GE) to establish the largest blast furnace gas power plant in China.

The power plant, with two 160-mW units, will make use of blast furnace gas, the main emission of iron and steel works.

It has the capacity to generate 2.4 billion kWh of electricity a year and reduce emissions by 2 million tons of carbon dioxide. The system is also able to produce 160 tons of steam per hour as a critical part of steel production process.

Delivery of the gas turbines is scheduled for late 2008 and the plant expects to begin operation in late 2009.

"The partnership with GE and the blast furnace gas (BFG) project meet the demand of high efficiency and low emission for WISCO," said Deng Qilin, president of WISCO.

"We will continue to drive sustainable growth and utilize the latest technologies to develop the new growth model, which is focused on energy conservation and environment protection."

"One of the greatest challenges to the steel industry around the world is effectively reducing emissions," said Jack Wen, GE Energy's regional executive for China.

About two years ago, Baosteel Group started to establish the first BFG-fired combined cycle power plant project by GE.

"It may begin operation in November," said Zhang Chun, a GE spokesman responsible for the BFG project. "In recent years, many Chinese iron and steel works are making efforts to launch a new industrial model with higher efficiency and less emissions."

Jeff Immelt, GE's chairman and CEO, said the continuous restructuring of China's growth strategy provides a great opportunity to GE.

"With the special requirement of high efficiency and low emission of the Chinese steel industry, the production and services of GE will be more successful," Immelt said.

According to the agreement with WISCO, GE will provide more services, including environment-related technologies, water treatment, power distribution, automation, financial services, as well as leadership training.

China's gasoline imports up almost 8,000 percent August

China's imports of gasoline hit a ten-year high in August after the country's economic planner ordered state-owned oil firms to make up shortfalls in supply.

Imports reached 45,000 tons last month, up 7,896 percent from August last year.

Meanwhile, exports shrank to 257,000 tons, down 18.3 percent from August last year and down from 330,000 tons in July and 526,000 tons in June.

China has been a key gasoline exporter in Asia with small amounts of imports. It imported only 13.6 tons of gasoline in July.

Tian Chunrong, an analyst with the China Petrochemical Corporation (Sinopec Group), China's largest oil refiner, said the government order for a guaranteed domestic gasoline supply was the major reason for both the sharp rise in imports and the drastic drop in exports.

The National Development and Reform Commission (NDRC), China's top economic planner, in early August required the China National Petroleum Corporation (CNPC) and the Sinopec Group, the two state-owed oil giants, to increase oil refining volume and reducing exports of refined oil products to ensure the domestic supply.

Chinese motorists would see no shortage of gasoline and the two oil giants were sending signals that domestic supply could be guaranteed by increasing imports and cutting exports, said Tian.

A supply shortage hit some gas stations in July mainly due to the price hikes of crude oil in the international market.

Rising inflation risks restrained the government from hiking prices of refined oil products, which were still under state control, despite record international oil prices since late June.

Refineries had to reduce output or raise the wholesale price, both contributing to the apparent shortage in the domestic market, said Tian.

Experts predicted that China would be a temporary gasoline importer and its imports could drop when the strong demand diminished after the summer hike.

Another record month for imports is imminent in September, as Sinopec announced earlier that it planned to import 60,000 tons of gasoline at a loss of nearly 30 million yuan to meet domestic supply.

In China, oil prices are controlled by the government, which has subsidized oil companies since 2005. Last year Sinopec received five billion yuan (657.9 million U.S. dollars) in subsidies.

China's Jan-Aug industrial profits soar 37%

China's industrial firms reported 1.56 trillion yuan (US$208 billion) of profits in the first eight months of this year, up 37 percent from a year earlier, official figures released on Thursday show.

Profits of state-owned enterprises rose 31 percent to 680.1 billion yuan, while collective and foreign-funded enterprises scored 39.3 billion and 418.4 billion yuan respectively, according to the National Bureau of Statistics (NBS).

Profits of private enterprises hit 260 billion yuan, up 48.5 percent compared with the same period last year.

The booming growth was primarily driven by soaring profits in sectors such as steel, building material, and transport equipment, according to NBS.

Steel firms saw their profits rising 58.9 percent from the same period last year, profits of building material companies surged 64 percent and that of transport equipment makers went up 66.5 percent.

However, profits of oil and gas exploiters reported 16.2 percent drop in profits in the eight-month period.

Gazeley to create a Kunshan logistics center

UK-based Gazeley Properties Limited, a wholly owned subsidiary of global retailer giant Wal-Mart, is scheduled to create a logistics center with a construction area of 53,000 square meters and a land area of 146.3 mu (or about 97,582.1 square meters) in the eastern Chinese city of Kunshan.

The first phase of the project will start next month and the project is scheduled to be completed by June 2008.

Kunshan is 55 kilometers west of Shanghai and this project is part of Gazeley China's expansion plan. The company has already developed a distribution center in Tianjin and a warehouse in Jiaxing. The first to be finished in September 2007 and the second in July 2008. These two projects will provide services exclusively for Wal-Mart while the Kunshan warehouse is being developed and designed for leasing.

Gazeley China is planning to develop more logistics projects in the Yangtze River Delta, the Pearl River Delta in southeast China, the Peripheral Economic Zone of the Bohai Sea, and west China areas.

4G telecom technology standards for 2008-09

China has not yet got 3G (which stands for third generation) mobile communication up and running as yet. It is in trial mode and this will extend dramatically through the last months of this year and the early part of next. It is essential that it is up and running well in time for the Olympics.

Looking beyond that to the next generation according to Wen Ku, director of the Department of Science & Technology at the Ministry and Information Industry, China plans to submit home-grown fourth-generation (4G) mobile technology standards to the International Telecommunications Union (ITU) between 2008 and 2009.

This is pretty important stuff. 4G takes the last barrier away from totally portable communication.

With it the difference between a mobile phone and a computer and a PDA, a personal digital assistant, ceases to be relevant. The machine that communicates can be call anything you like. All you know is that you have very fast access to the Internet wherever you may be.

The ITU earlier announced it will solicit 4G technology standards from countries all over the world starting next year, and that the final technology will be put to commercial use around 2010.

Wen told reporters that China has already formed an improved TD-SCDMA industry chain, including system, terminal, chip, software and instruments. He said some advanced services, including wireless streaming media and wireless broadband services, are under preparation based on the current TD-SCDMA network trial in ten Chinese cities.

Intel, Nokia and NSN Collaborate on WiMAX Interoperability

Intel, Nokia and Nokia Siemens Networks have jointly announced that they have started testing interoperability across Intel's forthcoming WiMAX silicon for laptops and mobile Internet devices, Nokia WiMAX devices and Nokia Siemens Networks WiMAX infrastructure equipment.

Nokia also said it will use Intel's WiMAX silicon product, which is codenamed "Baxter Peak" in its forthcoming Nokia Nseries Internet Tablets. The Internet tablets will be among the very first WiMAX-enabled open Internet devices expected to ship in 2008.

Intel, Nokia and Nokia Siemens Networks have already started testing their equipment and devices with dozens of other equipment vendors' products for interoperability and conformance with industry standards in Sprint's Herndon, Va. testing labs. Early interoperability testing between multiple industry partners will help to reduce the amount of time required for their respective products to successfully pass through the technical requirements from the WiMAX Forum thus accelerating time-to-market.

Nokia Internet Tablets to Become WiMAX-ready

Nokia Nseries Internet Tablets are based upon the open source Linux operating system, to enable both Nokia and Intel's vision of the "open Internet" - delivering broadband Internet experience to users on the go. In 2008, this platform with Intel's Baxter Peak WiMAX silicon will work on the Sprint Xohm WiMAX network.

Based on the same WiMAX baseband silicon found in Intel's "Echo Peak" MiniCard module for laptops and ultra-mobile devices, Baxter Peak is optimized for small form factors and low power consumption. It also includes multiple input/multiple output antenna techniques, supporting better reception and faster throughput in challenging environments.

China's Huawei plans to tap IPTV market in India

Leading Chinese telecommunications network provider Huawei is planning to tap the relatively unexplored Indian market for its IPTV (Internet Protocol Television) products.

"The potential of IPTV products in India is immense," director (Integrated Marketing Communications) of Huawei Meddy Lu told a visiting group of Indian journalists here on Thursday.

"India has not grown very fast in terms of IPTV connectivity but there is a huge requirement for these products," she said.

However, she did not elaborate on the amount of investment the company plans.

The proposed move assumes significance in the wake of broadcast regulator Telecom Regulatory Authority of India's (TRAI) announcement earlier this week that a draft paper on IPTV services in India is expected to be ready within a month.

Earlier, TRAI had sought a consultation paper on provisioning of IPTV services, saying there was lack of clarity on who could provide such facilities.

Huawei has been partnering and supporting global operators in IPTV commercial operations.

The company also plans to enter mobile broadband business in India.

"We have a high market score on data cards and modems. We have asked operators to built the mobile broadband business in India," Meddy said.

Huawei sold 27 million of its various products in India last year.

"This year, we have already achieved sales of 17 million sets in the first six months," Meddy said.

LED maker Para Light to set up new plant in China

Taiwan-based LED specialist Para Light Electronics plans to invest US$15 million to establish a new plant in Jiangsu, China to expand market share in the market, according to a Chinese-language Commercial Times report.

Para currently has monthly capacity of 80-90 million LEDs. The executives at its Nanjing plant stated the demand for the lamp products is in most shortage. The company has added two more new facilities with new capacity to come on board by the year-end, reported the paper.

China, India advance feasibility study on trade arrangement

Chinese and Indian officials have made progress in joint research on the feasibility of initiating a regional trade arrangement, China's Ministry of Commerce announced on Thursday.

The two sides met in Beijing for a two-day consultation, which ended on Wednesday, and reached a basic agreement on cargo and service trade, investment as well as trade and investment facilitating measures, said ministry spokesman Wang Xinpei.

The consultation was the fifth of its kind since March 2006, and the two countries planned to conclude the research at the sixth consultation meeting to be held in New Delhi by October, Wang said.

The two sides would then decide whether to start free trade agreement (FTA) negotiations.

The first four months had seen trade between China and India surge by 56.8 percent year-on-year, the highest among all the major trade partners of the world's fourth largest economy, to 11.4 billion US dollars, according to Chinese customs statistics.

The joint feasibility research was initiated in April 2005 by Chinese Premier Wen Jiabao and Indian Prime Minister Manmohan Singh. New Delhi has hosted the consultations twice and Beijing three times.

Pakistan, another rapidly developing South Asian country whose economy is enjoying an annual growth of between six and eight percent, reached a free trade agreement with China on Nov. 24, 2006.

China has learned the importance of regional free trade agreements. During the first three years after the North American Free Trade Agreement was signed by the United States, Canada and Mexico in 1994, Mexico saw its exports of men's shirts to the United States soar by 122.9 percent while those of China declined by 38.1 percent.

"If you are not part of regional trade arrangements, you stand to lose," Vice Minister of Commerce Yi Xiaozhun said.

China is in talks with 28 countries and regions on regional trade arrangements and has already clinched an FTA with Chile and a cargo trade agreement with the Association of Southeast Asian Nations (ASEAN).

China considers abolishing all steel export tax rebates - report

China is considering scrapping export tax rebates for all steel products and raising export taxes for some products to 15 or 25 pct, the Beijing News reported, quoting sources close to the matter.

A source was quoted as saying that some officials from the National Development and Reform Commission (NDRC) suggested that China should raise the export tax rate for hot rolled steel from 5 pct to 15 pct, and that for steel billets, from 15 pct to 25 pct.

Among the suggestions that NDRC has yet to decide on was for export tax for steel products, including wire and steel plates, to be raised to 15 pct from 10 pct, the source said.

Tax rebates for the export of cold rolled steel, stainless steel, and silicon steel have now been abolished, the source added.

Chinese premier urges technological upgrade in coal industry

Chinese Premier Wen Jiabao on Thursday called for technological upgrade to sharpen the competitive edge of China's coal industry and protect Chinese miners.

The premier made the remarks while meeting model workers from the coal industry at the Great Hall of the People.

He expressed appreciation and respect for the 5.5 million workers in the coal industry, saying the Chinese people would not forget the great contributions they had made to the nation's economic development.

The premier said the industry had made encouraging progress in structural reform, technical development and production safety with an annual output of 2.3 billion tons.

He instructed coal companies to step up technological progress to build "safe and highly efficient" mines and protect miners' lives. He urged companies to provide more staff training to raise their safety awareness.

Meanwhile, the premier said stories of dedicated coal workers should be publicized and the whole society should pay due respect to coal workers.

Coal already provides up to 70 percent of China's energy needs, mostly for the power sector and steel industry.

Singapore Petroleum to Buy China Oilfields for $223M

Singapore Petroleum Co. Ltd. (S99.SG) said Thursday it has bought offshore oilfields and got exploration working interests in Bohai Bay in China for $223 million.

In a statement, SPC said its subsidiary, SPC E&P (China) Pte. Ltd., won a bid for all the shares of Sino-American Energy Corp., which owns the oilfields and exploration blocks in Bohai Bay.

Sino-American is a subsidiary of Texas-based Ultra Petroleum Corp (UPL).

'The rationale for adding Bohai to our stable is two-pronged,' said Chief Executive Koh Ban Heng in the statement. 'One, it is in line with our long-term strategy to grow our business through upstream activities. The other is to tap the vast potential of China, both as a major oil and gas-producing region and as a key market.'

SPC's share of the current Bohai production will be 4,300 barrels of oil a day, bringing SPC's total current oil and gas production to more than 11,000 barrels of oil equivalents a day.

SPC said it does not expect the deal to have any material impact on the earnings per share and the net tangible asset per share of the company for the current financial year.

The acquisition will be funded through internal resources and bank borrowings and is expected to be completed by the end of October.

On a proforma basis, the net profit from the acquisition for the six months from July to December this year is expected to be S$12 million.

It would have raised earnings per share from 55.2 Singapore cents to 57.6 Singapore cents last year, assuming the transaction had been completed by Dec. 31, 2006.

Sinopec Plans Record Bond Sale for Gas Field, Plants

China Petroleum & Chemical Corp. plans the nation's biggest corporate bond sale as part of proposals to raise as much as 50 billion yuan ($6.7 billion) to finance gas and chemicals projects.

Asia's largest refiner, known as Sinopec, will ask shareholders to approve in November a 30 billion yuan bond that includes warrants convertible into stock, it said yesterday. A separate, 20 billion yuan sale cleared by investors will proceed, Sinopec said today.

China is encouraging companies to sell bonds to reduce reliance on bank loans and provide investors with an alternative to a stock market that has quadrupled in a year. Sinopec needs to fund a capital spending bill that's forecast to jump 38 percent this year as energy demand surges in the fastest-growing economy.

"Sinopec has many new projects coming up and the company has huge capital expenditure plans," said Grace Liu, an oil analyst at Guotai Junan Securities Hong Kong Ltd. "Selling bonds with warrants is a new way of financing and will help Sinopec meet its funding needs."

The government has approved 99.2 billion yuan of corporate bond sales this year. Companies also sold 211.9 billion yuan of commercial paper with maturities of one year or less in the first eight months, according to the central bank.

Share Market

Bonds still trail shares as a source of corporate fund raising. Companies generated 253 billion yuan by selling stock in the first half of 2007, according to the securities regulator. China's benchmark CSI 300 Index has gained fourfold in the past year, the best performance among 89 global benchmarks tracked by Bloomberg.

Sinopec's Shanghai-traded shares have more than doubled this year, making them the best-performing member of the 59-strong Bloomberg World Oil & Gas Index. The stock rose 3.1 percent to 18.95 yuan by 11:30 a.m. In Hong Kong, Sinopec gained 2.9 percent to HK$9.76 by the 12:30 p.m. midday break, headed for a record close.

Sinopec this month started building a pipeline to take gas from the Puguang field in southwestern China to Shanghai to meet rising demand for cleaner-burning fuels. The 1,700-kilometer (1,056-mile) link will cost 62.7 billion yuan.

Gas Reserves

Puguang held 356 billion cubic meters of gas reserves by the end of last year, Sinopec President Wang Tianpu said last month. The company may be able to increase the reserves by about 100 billion cubic meters a year, Chen Deming, vice chairman of the National Development and Reform Commission said Sept. 11.

Sinopec will also use proceeds from the 30 billion yuan bond sale to fund a 21 billion yuan ethylene plant in the northern city of Tianjin and a chemical plant in the eastern city of Zhenhai, it said in a statement to the Hong Kong stock exchange yesterday. Ethylene, produced from crude oil, is used in plastics.

"We decided to sell another 30 billion yuan of bonds to raise funds, in addition to the 20 billion yuan issuance approved by shareholders earlier," Huang Wensheng, Sinopec's Beijing- based spokesman, said by phone today.

A 30 billion yuan bond sale would be the largest transaction of its type not conducted by the government or a bank in China, Bloomberg data show. Sinopec projects 2007 capital spending at 110 billion yuan.

The company will issue 300 million six-year bonds incorporating warrants that can be converted into Shanghai-traded stock at a ratio of one share for every two warrants. Shareholders will be asked to approve the 30 billion yuan sale at an extraordinary general meeting on Nov. 15, Sinopec said yesterday.

Interbank Market

The plan to raise 20 billion yuan for Puguang will include selling 10 billion yuan of 10-year bonds and 10 billion yuan of five-year bonds for trading on the interbank bond market, Sinopec said, without saying what coupon the bonds will pay.

China in August issued rules allowing more listed companies to sell corporate bonds on a trial basis in an effort to encourage the growth of the local market for the securities.

Companies that have listed their shares on either the domestic or overseas exchanges can sell corporate debt, China Securities Regulatory Commission said in a statement posted on its Web site.

The National Development and Reform Commission's strict guidelines have meant approvals to be a qualified issuer were mostly restricted to major state-owned companies.

The new rules canceled a requirement for companies to seek bank guarantees for bonds they sell, which they had to do under previous regulations in effect since 1987. Issuer qualifications will now be based on credit ratings and certain financial ratios.

Lu'an XJ Coal Chemical Industry Group Established

On the afternoon of Sep 26th, Lu'an XJ Coal Chemical Industry (Group) Co., Ltd, which is reorganized by Shanxi Lu’an Group and XJ Hami Coal Mining (Group) Co., Ltd, was established. Wang Lequan, member of Political Bureau of CPC Central Committee, secretary of CPC XJ Committee unveiled the shingle for the company. Before the ceremony, Wang Lequan met with Jin Shanzhong, vice governor of Shanxi province.

Wang Lequan hopes that, Lu'an XJ Coal Chemical Industry (Group) Co., Ltd can combine the advantages of technique, talents, and managerial expertise with the resources advantages of XJ, so as to better run and develop the enterprises.

Wang Lequan also hopes Shangxi province can organize more competitive enterprises to inspect and invest in XJ, so as to strengthen the communication and cooperation between the two sides.

Jin Shanzhong expressed that, Shanxi province will actively implement external development strategy, encourage more enterprises to participate in the recourse exploitation and utilization in XJ.

After then, Wang Lequan and Jin Shanzhong unveiled the single for Lu'an XJ Coal Chemical Industry (Group) Co., Ltd.

It is learned that, Lu'an XJ Coal Chemical Industry (Group) Co., Ltd will base on Hami Coal Mining Group, properly exploit and utilize the coal resource in Zhundong area, and develop the related industries such as coal, coal gasification and coal turned oil industry.

China invites Russia to build two more reactors at Tianwan

China has invited Russia to build the third and fourth units at the Tianwan nuclear power plant, the first deputy president of the Atomstroiexport company, Alexander Glukhov, told the media on the sidelines of the energy forum Fuel and Energy Complex of Ukraine: the Present and the Future.

"A week ago there arrived a proposal from the Chinese client for building the third and fourth nuclear reactors at Tianwan," he said, adding that the company had already received a copy of the contract and negotiations over it had begun.

Glukhov speculated the drafting work may be over sometime next year.

Sasol seeks expansion in China

Sasol Ltd, the leading chemicals manufacturer in South Africa, said on Wednesday that it set up an office in Shanghai to sell its chemical solvents in China.

Sasol Chemicals Shanghai Co. Ltd. (SCS) will first sell products from the global Sasol Solvents business, which operates plants in South Africa and Germany.

Sasol Solvents built plants in South Africa and Germany to supply a wide range of products, such as glycol ethers, C3/C4 alcohols, esters and acids, ethanol, ethyl acrylate, fine chemicals and aldehydes, glacial crylic acid, ketones, methanol, n-butyl acrylate and mining chemicals.

Reiner Groh, general manager for Sasol's chemicals businesses, said the opening of SCS will consolidate Sasol's profitable and sustainable growth and new business development in chemical industry.

As the largest coal producer and consumer in the world, China is encouraging coal-to-liquid (CTL) projects in order to reduce its dependence on imported oil. Therefore, Sasol prepares to implement CTL plans in China.

MoneyGram to expand in China

MoneyGram International, the world's second largest remittance firm, has signed agreements with several domestic banks that will act as its agents in the local market, the company said.

MoneyGram's local partners are the Industrial and Commercial Bank of China (ICBC) <601398><1398>, China CITIC Bank<601998>, Bank of Communications (BoComm)<601328> <3328> and Industrial Bank<601166>. The money transfer network includes 20,000 agents nationwide. MoneyGram will focus on the expansion in Guangdong, Fujian, Beijing, Heilongjiang, Liaoning, Jilin provinces, where more people go abroad for immigration or study.

Philip Milne, CEO of MoneyGram, said the firm will apply low-price strategy to increase its market share in China. Under this pricing strategy, the commission and service charges will be lower than its local rivals, in some cities even 20% lower.

The company entered China in 2003 and established an office in Shanghai in 2004. MoneyGram will increase investment in China, as China is expected to be the top 1 to receive global immigrant remittances this year.

HSBC to form JV insurance firm in China

China's insurance regulatory has finally approved HSBC Holdings'<5> proposal, to establish a new joint venture insurance company. This is the first venture of such nature, whereby a foreign insurer forms a venture bridging Hong Kong and China.

Together with National Trust, a Chinese trust and investment firm, HSBC will enter into a 50-50 venture, to build up an individual insurance network, with a strong emphasis on life insurance, in the nation with the largest population.

Although HSBC has yet to arrive with a figure for the initial start up of the entire operation, the company revealed incurring a minimum of US$67 million for the acquisition of an operational license within the country. Headquartered in Shanghai, the new firm is scheduled for operation to commence around the later half of 2008.

According to the report, sales of the insurance services will be conducted through National Trust's business network, and HSBC's banking clientèle. Sales are also likely to be diverted to Bank of Communications<601328><3328>, a Chinese commercial bank, where HSBC has 18.6% stakes in.

China insurance premium business amounted to US$49.5 billion in the first six months of the year, increasing by 20% from the same period last year.

North China Shipping to raise US$700 mln from HK IPO

North China Shipping Holding Co.Ltd, the Hong Kong unit of Hebei Ocean Shipping Co Ltd involved in international bulk cargo shipping, announced intentions to raise a minimum of US$700 million in a Hong Kong IPO.

Through the public offering, the proceeds raised will be directed towards funding higher freight rates and transportation costs for raw materials. With record shipping rates and a very active market, the company aims to complete procedures for an IPO and float shares by the end of the year.

With surging demand for energy in China, the Baltic Exchange's dry freight index, an indicator of ship freights, doubled in the past year and even yielded a record high of 9,259 on Wednesday.

Good performances marked by rival shipping companies in the stock market, is another pull factor for North China Shipping to list. This year, shares of China Shipping Development Co<600026><1138> doubled, whilst shares of Pacific Basin Shipping<2343> tripled and reported a record high on Thursday.

Sinopec to sell RMB 20 bln worth of corporate bonds

China Petroleum & Chemical Corp (Sinopec)<600028><386>, China's leading oil and gas producer, received approval from the National Development and Reform Commission (NDRC) to sell RMB 20 billion (US$2.66 billion) worth of corporate bonds in November.

It will expand its corporate bond issuance quota in Beijing to RMB 218.7 billion this year, compared with RMB 60.8 billion last year.

Sinopec's subsidiary Chuan Qi Dong Song Engineering Co. will divide the bonds equally between 5-year and 10-year tranches.

The deal by the engineering company, which delivers natural gas from Sichuan province to the east coast, will be underwritten by China International Capita Corp., Goldman Sachs Gao Hua Securities Co and BOC's subsidiary BOCI Securities Ltd.

After issuing RMB 99.2 billion bonds quotas to 95 companies in March, the NDRC will increase the corporate bond quota by RMB 99.5 billion this year. It will grant RMB 60 billion worth of quota to the Ministry of Railways and RMB 39.5 billion worth of quota to China State Grid Corp.

According to the official website of the China Government Securities Depository Trust & Clearing Co ChinaBond, China issued only RMB 53.6 billion worth of corporate bonds, or 1% of the total bonds issuance, at the end of August 2007.

Taiwan wind-power to be lifted 10-fold

TAIPEI, Taiwan -- Taiwan may spend more than NT$100 billion (US$3 billion) during the next three years to increase wind-power capacity 10-fold and cut coal and gas imports.

"Renewable energy can help us reduce dependence on overseas resources," Wang Yunn-ming, deputy director general of Taiwan's energy bureau, said in an interview in Taipei before a press conference on the plan later yesterday.

Wind may help curb the use of coal and natural gas, which currently each fuel about a third of Taiwan's power generators. The target of constructing turbines with capacity of 2,159 megawatts compared with 217.2 megawatts now may prove over- ambitious, said economist Liang Chi-yuan.

"There's a big question mark over whether Taiwan can build so many wind turbines," said Liang, from Academia Sinica in Taipei, the island's state research institute. "The best locations are already taken."

Generating electricity from wind costs about NT$1.7 for each kilowatt-hour, compared with the average of NT$1.3 in Taiwan, Wang said. State-run utility Taiwan Power Co. pays wind turbine operators NT$2 per kilowatt-hour, he said. The island imports all its coal and more than 90 percent of its gas needs.

"Wind power technology is the most mature among renewables, and its costs are close to those of traditional generation," he said.

The figure of more than NT$100 billion will include spending on Taiwan's first undersea electricity cables to transmit power from offshore sites as far away as the Penghu archipelago, about 45 kilometers (28 miles) from the main island, Wang said.

Offshore turbine capacity may total 360 megawatts by 2010, according to a report from the bureau, distributed at an industry conference yesterday. That may eventually rise to 1,200 megawatts, Wang said, without giving a time frame.

Wind farms, both those built on land and in the sea, may account for about 5 percent of Taiwan's total installed capacity by 2010, he said. That compares with 0.4 percent as of July, according to Taiwan Power's Web site.

This month the government started accepting applications from private companies for building the island's first offshore wind farm, citing difficulties in finding onshore sites. Permission for a total of 300 megawatts will be granted within three years.

The government is promoting wind power, because "we have plentiful wind resources," Wang said. The island's turbines are productive for as much as 35 percent of the time, compared with 20 percent in Germany, he said.

Mainland dissatisfied with Taiwan's "picky" restrictions on crab imports

The crab trade across the Taiwan Strait has slowed in what should be its peak season due to picky quarantine standards put forward by the Taiwan authorities, said a Chinese mainland official here Wednesday.

"We hope the related non-governmental organizations from both sides will carry on negotiations so that Taiwan people can enjoy this delicacy at the right time," said Li Weiyi, spokesman of the Taiwan Affairs Office of the State Council.

Fresh crabs, especially those bred in east China's Jiangsu Province, have become a traditional and popular mid-autumn dish and have sold well in Taiwan.

The two sides had reached an agreement on quarantine standards of crabs in July, but in August the Taiwan authorities submitted new standards requiring residues of all drugs to be undetectable, which was too picky and impractical, Li said.

The mainland had exported quality and safe food, he said, adding that 99 percent of food exported to Japan and the European Union met their standards.

"We do expect the two sides to show sincerity and settle this problem for the benefit of consumers," he said. "We have noticed that a certain group in Taiwan is trying to discredit mainland foods. Such politically driven action will greatly harm normal trade across the Strait."

In the first eight months of this year, the mainland has found 27 consignments of unqualified food imported from Taiwan. "We handled them according to regulations, but did not exaggerate the situation," Li said.

He said the mainland would continue encouraging imports of produce from Taiwan.

A 30-member purchasing group from the mainland visited Taiwan this month and signed an initial agreement to buy 2,000 tons of local fruits.

"We will support more farm produce importers and trade organizations in visiting Taiwan," Li said.

Meanwhile, he urged the Taiwan authorities to speed up the talks on opening Taiwan to mainland tourists.

Tourism organizations from the two sides had held six rounds of talks on technical issues.

"The two sides have developed common understanding, but a number of problems remained unresolved," Li said.

After the fifth round of talks, the mainland put forward a set of practical solutions, but the Taiwan authorities had made no response for months, he said.

China to hold fair for Latin American, Central and Eastern European commodities

China is to hold a trade fair for commodities from Latin America and Central and Eastern Europe in Beijing from Nov. 22 to 24, according to the Ministry of Commerce.

"The fair will feature about 200 booths with a total area of 5,000 square meters," said Wang Xinpei, the ministry's spokesman, at a regular press conference.

"The fair mainly aims to boost exchanges and cooperation between Chinese enterprises and those from Latin America as well as central and eastern Europe," Wang said.

"It will offer companies from Latin America as well as central and eastern Europe booths free of charge to display their traditional and excellent products and help them explore Chinese markets," he said.

By Sept. 15, the ministry had received participation applications from Mexico, Brazil, Argentina, Peru, Hungary, Croatia, Poland and many other countries, and 182 booths had been booked.

Nation may be net exporter of siloxane

CHINA may turn into a net exporter of siloxane in 2010 as few major new capacities have been announced elsewhere by that time, a Dow Corning Corp vice president said yesterday.

Siloxane is used in the manufacture of silicones which can be used in applications for virtually every industry, ranging from automotive and electronics to construction and textiles.

"Right now there's lots of siloxane imports in China. But in the future, almost no capacity had been announced elsewhere except for China," said Jean-Marc Gilson, who is also Asia president for Dow Corning.

The US company, equally owned by Dow Chemical Co and Corning Inc, is a leading player in the world's silicone industry.

Dow Corning is building a 200,000-ton-a-year plant for siloxane and fumed silica in Zhangjiagang, Jiangsu Province, with German partner Wacker Chemie AG. Construction will finish in 2010.

Global demand for silicone products is growing at six to eight percent annually, with emerging markets experiencing much faster growth. And for China, the pace could be two or three times its economic growth, Tokyo-based Gilson told reporters in Shanghai.

This could be driven by rising demand from industries like solar energy as China addresses environmental issues, prompting opportunities for companies like Dow Corning to make more products with higher added value.

Gilson said newly added capacities in China will turn it into a net exporter of the commodity in 2010 or 2011, with production capable of supplying other emerging markets like India, East Europe and South America.

European Parliament demands toys meet EU standards

The European Parliament called in Strasbourg yesterday in a resolution on the European Commission and member states to take necessary legislative and administrative action to ensure that consumer goods marketed within the bloc meet EU standards.

The resolution on the safety of products, particularly toys, was passed with 660 votes in favor, 18 against and 7 abstentions at its plenary meeting.

It urged the European Commission, the executive body of the EU,to improve the enforcement measures of the toys directive, including effective sanctions for non-compliance and to present the planned revision of the Toys directive by the end of this year,making sure efficient and effective requirements for product safety be included.

The parliament said that 24 percent of all detected unsafe products are children's toys in 2006.

Parliament member David Martin from Britain proposed "courses of action."

"Firstly, we have to push manufacturers to take a greater interest in their supply chain and, if necessary, apply penalties to those who do not take that interest. Secondly, we need the Commission to bring together the Member States to ensure tougher inspections in Europe, to ensure adequate customs control and to ensure the application of the existing European Union laws," he said.

Parliament members also called on the Commission to ensure that the CE marking is a guarantee of compliance with EU technical legislation, stressing that the CE marking, given its self-regulatory character, was never intended to be an EU-wide safety mark.

It urged the Commission to assess the added value of creating a common European Consumer Safety Label, complementary to the CE marking, for all economic operators to help consumers to make an informed choice between products.

The misuse of other voluntary marks should be made subject to penalties as well, it added.

The document called on the Commission to clarify the procedure on import bans on a case-by-case basis when safety standards are regularly not met and use its powers to ban consumer goods from the EU market if they are found unsafe.

As for EU member states, the resolution asked them to ensure strict enforcement of product laws, to step up efforts to improve market surveillance and especially national inspections and to make available sufficient resources to be able to undertake comprehensive and effective controls.

Industrial value-added in August up 17.5% year on year

The National Development and Reform Commission yesterday issued a report, showing a rapid growth in industrial production for August, with industrial value-added increasing 17.5% year on year. The growth speed was 0.5 percentage point slower than July but 1.8 percentage points higher than the same month of last year.

Data also show the value added in light industry and heavy industry each registered a 14.8% and 18.8% increase, both slower than July. Between Jan. and Aug., the figures were 16% and 19.4% respectively, showing a 0.7 and 1.1 percentage-point pickup year on year.

August also saw an upswing in the prices of production materials. The market price of product materials in circulation rose 1% compared with that in July, or 3.3% year on year. The ex-factory price of industrial products posted a 2.6% increase year on year, up 0.2 percentage point than July. Raw materials, fuel and power all showed a 3.8% hike in prices, up 0.2 percentage point month on month.

In terms of major industrial operations, production of coal, electric power and oil registered stable growth but production of steel, flat glass and non-ferrous metal slowed down a bit than the previous month. Prices of steel products, cement and flat glass picked up somewhat. A slowdown was also recorded in the production and export of mechanical, electronic goods and textile. Light industry showed an increase in export.

Diplomats agree food quality a global issue

Foreign diplomats agreed yesterday that food safety and product quality is a common concern for all countries and called for better international cooperation, especially information exchange and setting standards.

"What we've learned in recent months is that product safety issues are no longer one country's problem, but a global problem. This requires a global approach and solution," Les Kumor, a counselor at the Canadian Embassy, said.

"Experience shows the best solution is always through dialogue, cooperation and practices complying with international rules and standards."

Kumor made the remarks at a round-table meeting with senior Chinese quality control officials, including Wei Chuanzhong, vice-minister of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), in Zhongshan, South China's Guangdong Province.

Diplomats were present from the European Commission and 14 countries, including the United States, Canada, Germany, Australia, Argentina, New Zealand and South Korea.

Peter Hewitt, a counselor at the Australian Embassy, said no country is immune to quality control problems and stressed all governments have a responsibility to improve the situation.

A report released on Tuesday by the inspection and quarantine bureau in Shenzhen, a major port city in Guangdong Province, backed up this thinking.

The report showed that so far this year, quarantine officers in the city had found 80 batches of unsafe frozen meat from other countries, much higher than the same period last year.

This year, officers in Shenzhen conducted two on-the-spot inspections on imported woven garments, and found 71 out of 81 samples were substandard because of unclear labels, erroneous PH values or excessive amounts of formaldehyde.

"While China is being criticized by foreign media for poor product quality, we see similar problems with products from their countries," the report said.

Hewitt said it was crucial to improve cooperation. He suggested countries should be more understanding and comply with common principles such as World Trade Organization rules. If possible, local standards should be consistent with international standards based on science.

Agricultural counselor at the US Embassy William Westman told Wei on Tuesday his country was willing to share information, clarify issues and offer technical support to China at anytime in the future.

In response, Wei said future cooperation would focus on the discussion of design and setting standards. He said China would also learn from other countries' experience in improving quality.

Jorgen Schlundt, director of the food safety department of the World Health Organization (WHO), said earlier this month that problems in emerging countries had been well documented

The round table meeting was part of a four-day tour the AQSIQ organized to offer diplomats a fair picture of Chinese manufacturing. During the ongoing tour, starting on Tuesday in Guangdong, diplomats were shown toy and garment factories, vegetable farms and testing laboratories.

"The tour improves our comprehension of your systems," Raimondo Serra, a counselor with the European Commission, said.

"I've repeatedly heard the phrase 'quality should start at the source', and these words are like music to my ears," he said, adding that this was a EU principle.

China supports stronger economic, trade ties with Micronesia

China supports more Chinese enterprises to participate in its cooperative projects with Micronesia, said Chinese Foreign Minister Yang Jiechi here Wednesday.

Yang made the remarks during a meeting with President Emanuel Mori of the Federated States of Micronesia on the sidelines of the 62nd session of the United Nations General Assembly.

"We support more Chinese enterprises to cooperate with the Micronesian side in such fields as agriculture, fishery, transport, telecommunications and infrastructure, and strengthen (the bilateral) economic and trade relations," Yang said during the meeting.

Mori, meanwhile, thanked China for its economic and technical assistance, saying Micronesia will adhere to its one-China policy and continue to make efforts for a stronger friendly partnership with China.

Taiwanese firm to increase investment in Vietnam

Tycoons Worldwide Group of China's Taiwan has decided to increase investment capital of its project on building a steel laminating plant in central Vietnam to four billion U.S. dollars from 1.8 billion dollars, local newspaper Pioneer reported Thursday.

Under the project, construction of the steel plant with an annual capacity of manufacturing five million tons of steel products, including stainless and carbon steel, will start in late October in the Dung Quat Economic Zone in central Quang Ngai province.

As much as 80 percent of the future plant's output will be earmarked for the domestic consumption, and the rest for export.

Now, Vietnam has to import around 80 percent of materials for steel production and a large volume of finished steel, according to the country's General Statistics Office.

Nanpu reserves likely to top two billion tons, PetroChina official

Nanpu offshore and inland reserves is likely to hit two billion toe in five to six years, PetroChina's vice president and chief geologist Jia Chengzao told China Daily.

Nanpu now posts a more conservative figure of 1.18 billion toe of reserves, as released by PetroChina this year. The Ministry of Land and Resources in Aug. said Nanpu was assessed as holding 445.1 million tons of proved oil in place, 94.91 million tons of probable oil reserves, 86.59 million tons of possible oil reserves, 53.61 billion cubic meters (amounting to 42.7 million toe) of proved natural gas in reservoir and 11.17 billion cubic meters of probable gas reserves.

Nanpu's current proven reserve is sufficient for PetroChina to build an annual output capacity of 10 million tons by 2012, Jia said.

Sasol Opens Shop in Shanghai

Sasol on Wednesday announced the opening of an office in Shanghai to market its diverse range of chemical solvents in China.

Sasol Chemicals Shanghai Co Ltd (SCS) will initially market products from the global Sasol Solvents business. Sasol Solvents operates plants in South Africa and Germany and supplies a wide range of products, including glycol ethers, C3/C4 alcohols, esters and acids, ethanol, ethyl acrylate, fine chemicals and aldehydes, glacial acrylic acid, ketones, methanol, n-butyl acrylate and mining chemicals. These are used in aerosol, agricultural, cosmetic, fragrance, mining, packaging, paint, adhesive, pharmaceutical, polish, printing and other applications.

"The Chinese market is extensive and forms part of our vigorous pursuit of global growth opportunities in the chemicals sector. We believe that we can offer a significant value proposition to the Chinese chemical markets. The opening of SCS in Shanghai will lay a foundation for profitable and sustainable growth by enhancing customer service through local currency sales and new business development," said group GM for Sasol Chemical Businesses, Reiner Groh.

Sasol also recently announced plans to increase its octene production at Secunda in South Africa by 100 000 tonnes per annum, and will also double its methyl iso-butyl ketone (MIBK) output at Sasolburg, near Johannesburg.

Octene is a comonomer that is used in the production of plastics. MIBK is used largely as a solvent in surface coatings.

ConocoPhillips eyes sale of China onshore gas field

U.S. oil firm ConocoPhillips (COP.N: Quote, Profile , Research) is looking to sell a gas field in China's southwestern Sichuan province, a company spokesman said on Thursday, although it only acquired the asset last year. The company has a 100 percent working interest in the 295,000 acre Chuan Zhong Block, which holds the Ba Jiao Chang gas field. The block operator is ConocoPhillips unit Burlington Resources. "We are in the process of marketing the asset, but have not yet concluded a sale," a company spokesman said. He declined to comment further.

Pilot production at the block began in 1999, and in 2006 last year gross production averaged 10.3 million cubic feet of natural gas per day, the company said on its Web site. China is keen to step up development of domestic oil and gas resources as its reliance on overseas supplies grows faster than its overall demand for crude.

Imports account for nearly half its oil.

But it also keeps a tight cap on refined oil and gas prices, currently well below international levels and eating into oil company profits, because of fears about inflation and social unrest.

Work on Sino-Kuwaiti refinery and petrochemicals project to gain momentum

Officials from the state-run Kuwait Petroleum International (KPI) have expressed concerns over the slow development of the multibillion Sino-Kuwaiti refinery and petrochemicals plant project. The key issues for the work progress that the Kuwaiti party is raising with the Guangdong government are such as the unsuitability of the site, and adverse impact on the local environment as the project is being built near populated Hong Kong. Concerns of the Kuwaiti government and Kuwait Petroleum Corp. (KPC) have been conveyed to local authorities in South China's Guangdong Province, resulting in an assurance by the authorities of their commitments and the special attention they are giving to the project.

The refinery will be built to process 100% Kuwaiti crude supplied by KPC, with a capacity of 13 million tpa (260,000 bpd), while the ethylene cracker unit is slated to have an annual production capacity of 1 mln tons. The project investment is estimated at US$5 billion, though cost may escalate, if the project is delayed.

The feasibility study work of the project is expected to be completed by January next year, followed by official approval to start the full engineering design work that normally takes one year.

PetroChina parent's Xinjiang oil pipeline enters operations

China National Petroleum Corp, the parent of PetroChina Co Ltd (HK 0857), said its oil pipeline serving oil fields in Xinjiang region has entered commercial operations, which has linked with the Sino-Kazakhstan crude pipeline.

The 433-kilometer oil pipeline links Dushanzi refinery with Urumqi via Kalamayi oil field, and has a designed capacity of two mln tons.

China and Kazakhstan invested a combined 700 mln usd in the 962.2-kilometer Atasu-Alashankou pipeline which was completed in November 2005.

The pipeline is ultimately designed to carry 20 mln tons of crude oil per annum, with annual output of 10 mln tons in its initial stages.

China and Kazakhstan have agreed to extend an oil pipeline that will link mainland China to the Caspian Sea, giving Beijing direct access to an energy-rich region controlled by Kazakhstan.

ConocoPhillips Puts China Gas Field Up For Sale

U.S. oil major ConocoPhillips (COP) is offering its Chuan Zhong block in China's Sichuan province to potential buyers in a rare sale of a Chinese onshore oil and natural gas asset by a foreign company.

The Chuan Zhong block, which covers an area of 295,000 acres in southwestern China and includes the Ba Jiao Chang gas field, produced an average of 10.3 million cubic feet of natural gas per day in 2006.

ConocoPhillips holds a 100% working interest in the block through an agreement with China National Petroleum Corp., China's largest oil company by output and the parent company of PetroChina Co. (PTR).

"We are in the process of marketing the asset, but have not yet concluded a sale," Charlie Rowton, Houston-based spokesman for ConocoPhillips, said in response to an inquiry from Dow Jones Newswires.

Rowton declined to comment further.

China's onshore oil and natural gas sector remains largely closed to foreign companies, with production tightly controlled by PetroChina and its main domestic rival, China Petroleum & Chemical Corp. (SNP), known as Sinopec.

Only a handful of foreign companies have secured a foothold so far, with Royal Dutch Shell (RDSA) and Total S.A. (TOT) drilling in the Ordos Basin in northern China's Inner Mongolia region.

However, China's rapidly growing energy needs and a lack of technology for tackling complex oil and gas fields have created opportunities for foreign companies.

Chevron Corp. (CVX) last month won the right to help develop PetroChina's high-sulfur Luojiazhai gas field in Sichuan.

ConocoPhillips acquired the Chuan Zhong block through its $35.6 billion takeover of Burlington Resources in March 2006, a deal which also gave it a 24.5% stake in the Panyu oil fields in block 15/34 in the South China Sea.

Pilot production began in the Chuan Zhong block in 1999 and government approval of the field development plan was granted in early 2004, according to information on ConocoPhillips' Web site.

By the end of last year, a total of 19 wells had been drilled in the Chuan Zhong block and development was ongoing, ConocoPhillips said.

ConocoPhillips' share of natural gas output from the Chuan Zhong block totaled 6.93 million cubic feet per day last year. In addition, the block produced small amounts of condensate.

Sichuan has yielded several major finds in recent years, including Sinopec's Puguang gas field with estimated proven reserves of about 356 billion cubic meters, putting the province on course to become China's key onshore natural gas-producing hub.

Earlier this year, PetroChina President Jiang Jiemin said his company had discovered a gas field at Longgang in Sichuan that could potentially be China's largest. Investors are currently waiting for PetroChina to announce formally the size of reserves at Longgang.

By disposing of the Chuan Zhong block, ConocoPhillips will be able to focus more resources on the offshore Peng Lai field in northern China's Bohai Bay, which is China's largest oil discovery by a foreign company to date.

The PL 19-3 field, discovered in May 1999, produced 22,700 barrels of oil per day on average last year, but this is set to jump when a second phase of production comes on stream in 2009.

ConocoPhillips, which is operator of the PL 19-3 field, expects the second phase to produce around 154,700 barrels of oil a day. It has a 49% stake in the field, with Cnooc Ltd. (CEO), China's largest offshore oil producer, holding the remainder.

In addition to the Chuan Zhong block, Peng Lai oil field and Panyu assets, ConocoPhillips also operates the 71,000 barrels a day Xijiang oil fields in the South China Sea. The Xijiang fields were its first offshore fields to go into production.

PetroChina starts building LNG project in Dalian

PetroChina Co Ltd (HK 0857), the country's largest oil and gas producer, has started building a liquefied natural gas (LNG) project in Dalian, in northeastern China's Liaoning province, the Dalian Daily reported.

The project includes an LNG terminal, a wharf and a gas pipeline, and will involve a total investment of over 10 bln yuan, the paper said.

Of the total, the LNG terminal will require investment of 6.86 bln yuan. It has initial receiving capacity of 3 mln tons per year.

Phase II of the terminal is expected to boost the receiving capacity to 6 mln tons per year.

No details were provided on bringing the project into operation.

Earlier this month, Royal Dutch Shell PLC (NYSE:RDS A) signed a binding agreement to supply liquefied natural gas from the Gorgon field in Australia to PetroChina International Co Ltd.

At the same time, Australia's leading oil and gas company Woodside Petroleum also reached an agreement to supply PetroChina with LNG from its Browse gas field off the coast of Western Australia, in a deal worth 35-45 bln aud.

PetroChina also plans to build LNG terminals in eastern China's Jiangsu province and Caofeidian in northern China's Hebei province.

(1 usd = 7.51 yuan)

China's CNOOC seen fairly valued, cut to 'neutral' from 'buy'

Goldman Sachs said it has downgraded CNOOC, the Hong Kong-listed arm of China National Offshore Oil Corp, to "neutral" from "buy" as it now views the stock as fairly valued given its recent sharp gains.

Shares in CNOOC have risen 84.2 percent since April 20, when Goldman put the company on its "buy" list, compared with a 45.6 percent increase in the Asia energy sector.

The brokerage said it regards CNOOC as fairly valued at its current price and any re-rating would depend on "the emergence of various catalysts."

Goldman Sachs analyst Kelvin Koh said he still prefers CNOOC among the large-cap Chinese oil majors because, being a purely upstream company, it has the highest oil price leverage among peers.

CNOOC's shares, up 30 percent since August 25, have benefited more than PetroChina, up 19 percent, and Sinopec, up 10 percent, from record oil prices, with the stock hitting multiple new highs in the last month.

In midday trading, CNOOC was down 18 cents or 1.4 percent at 12.28 Hong Kong dollars.

PetroChina was 12 cents or 0.9 percent lower at 13.68 dollars.

Investors also sold oil stocks after oil prices pulled back from their highs over the week with concerns having eased about possible supply disruption in the Gulf of Mexico.

However, analysts expect oil prices to remain strong in the near-term on supply concerns in the US, a disappointing production hike by the OPEC and geopolitical tensions in the Middle East. According to industry estimates, global crude prices are expected to average 67 US dollars in 2007, after hovering around 62-63 US dollars in the first half.

Goldman's Koh also said CNOOC has one of the best production growth outlooks, at an average of 15 percent between 2007 and 2009, among global integrated oil producers. The high growth rate should be sustained beyond 2009 because of recent discoveries such as Egina in Nigeria and Jinzhou 25-1, offshore China, he said.

CNOOC shares may be driven up further on account of an upgrade in potential Egina reserves, an announcement of potential reserve size for Jinzhou 25-1, any other significant discoveries in offshore China, and approval for a potential A-share listing, said Koh.

(1 US dollar = 7.80 Hong Kong dollar)

Norway's Sevan carried out $158 mln bond issue

Norwegian oilfield services group Sevan Marine (SEVAN.OL: Quote, Profile, Research) completed an 870 million Norwegian crowns ($157.6 million) bond issue to finance a new oil production vessel, the company said on Thursday.

The five-year bond has a coupon of NIBOR plus 5.5 percent and the proceeds will be used partly to finance construction in China of the Sevan Voyageur floating production, storage and offloading (FPSO) vessel, Sevan Marine ASA said in a statement.

Pareto Securities and Fearnley Fonds advised Sevan Marine in the transaction, it said.

China Announces Plans to Build 50 Coal Gangue Power Plants by 2010

China recently announced plans to build 50 power plants with a total installation capacity of 20 million kilowatts by 2010 through the comprehensive utilization of coal gangue, according to the National Development and Reform Commission's (NDRC) Notices on Related Issues Regarding the Construction of Power Generation Projects by Comprehensive Utilization of Coal Gangue in 2007-2010, which has prompted coal enterprises to raise the standard for the use of the gangue.

According to the report, 23 new projects with a total installation capacity of 18.5 million kilowatts in four regions, in addition to the coal-gangue power plants already under construction, have been arranged to begin construction from now until 2010. Eight of the new projects will add a total installation capacity of 3.7 million kilowatts, including the 300-megawatt Xiwu Jinshan gangue project in northern China's Inner Mongolian region and the two 300 MW Ningdong projects in northwestern China's Ningxia Region, among others.

Coal gangue, a solid waste, is produced from the processes of coal production, washing and selection. Statistics show that more than 200 million metric tons of coal gangue used for power generation are discharged every year in China. A large quantity of stockpiled gangue waste has not only occupied land resources, but it has also caused polluted the environment.

The NDRC's report will play an important role in guiding the preparations for power plants that use gangue, accelerating the use of resources such as gangue with low calorific value while promoting energy conservation and emission reduction in China.

Most of China's gangue power plants owned by coal enterprises are small.

Chinese coal prices will rise to record this year, KGI says

Chinese coal prices will rise to a record this year as demand surges, according to investment bank KGI Securities Co.

China, the biggest producer and user of coal, became a net importer of the fuel for the first time this year. The resulting reduction in supply on global markets has helped push benchmark Australian prices at Newcastle Port to a record in August, according to data from the McCloskey Group Ltd.

"Coal prices are likely to hit a new high in the fourth quarter," Steven Liao, a Taipei-based analyst at KGI, wrote in a report Wednesday. "China's economy will maintain steady growth" and "coal demand is particularly strong in the fourth quarter."

Chinese spot prices for coal used by steelmakers rose to a record 813 yuan (US$108.24) per tonne in August, according to McCloskey. The price for coal used to generate power was last month just 3 yuan off its record, reached in February, the company's data show.

Huang Teng, manager of Beijing's LT Consultants Ltd, said coal prices were likely to peak in 2008 before falling in 2009 as mining companies expand capacity, and better port and transportation projects are completed.

China's economy grew at the fastest pace in 12 years in the second quarter, expanding at an annual 11.9%. Growth was powered by investment in factories and real estate.

Taiwan Power Buys 17 Million Tons of Coal for 2008 to 2018

Taiwan Power Co., the island's biggest electricity producer, bought 17 million metric tons of power station coal to be delivered starting next year until as late as 2018, a company official said.

The company signed six-year and eight-year contracts with two suppliers from China for 500,000 tons each annually, the official said, asking not to be identified because of company rules.

It also agreed to buy 500,000 tons annually from an Australian producer and the same amount from an Indonesian supplier over 10 years, he said. Taiwan Power is also negotiating for a further 500,000 tons to be delivered annually for 8 years, he said, declining to give details of the prices or the sellers.

The price of coal loaded at Newcastle port was $67.42 a ton in the week ended Sept. 21, according to globalCOAL NEWC Index. Prices reached a record of $72.37 last month, after some Indonesian mines said they would miss contracted shipments, Japan bought more coal after an earthquake closed a nuclear plant and Newcastle shipments were disrupted by storms.

Taiwan Power bought 840,000 tons of coal in August, and 1.19 million tons in July for the fourth quarter.

China International Sourcing Fair opens in Shanghai

The first China International Sourcing Fair (ISF) opened on Monday in Shanghai, which attracted 260 buyers and 3,500 domestic suppliers. Commerce Minister Bo Xilai announced the inauguration of the ISF.

About 238 foreign buyers, including 53 firms among Fortune Top 500 Enterprises, attended the fair. According to the statistics, the purchasing list given by foreign buyers includes more than 2,000 commodities in 10 categories, with a value of about US$20 billion.

With an aim to solve the substantial trade surplus of China, ISF established "China Sourcing Area" for Chinese companies to purchase overseas goods. 22 Chinese buyers, including central enterprises, will purchase 100 commodities covering 16 categories worth of US$80 billion.

The China ISF is held annually in September since it was firstly held by Shanghai municipal government in 2002. The State Council approved to upgrade it to a national level fair in 2006. It is now organized by the Ministry of Commerce and Shanghai Municipal People's Government.

Baosteel buys 92.5% stake of Nantong Iron & Steel

Baoshan Iron & Steel Corp<600019>, China's largest steel maker, announced yesterday that it has bought 92.5% stakes of Nantong Iron & Steel Company (NISC) from its parent company for RMB 601 million

According to the Shanghai Security News, Baosteel Group listed its 92.5% stake of NISC in the Shanghai United Assets & Equity Exchange, and Baoshan bought the stake through a public tender. The final deal was inked at the price of RMB 601 million and has already been accomplished.

Nantong Iron & Steel, with registered capital of RMB 346 million, was built up in 1994, with Baosteel Group holding 92.5% stakes in the company. It has an annual production capacity of 1 million tons for seamless steel, while Baosteel are capable of manufacturing 1-million-ton seamless steel pipe yearly.

Baosteel is merging and reconstructing the group since 2007. It has got the approval from China Development and Reform Commission (CDRC) to build a joint venture with HanSteel, parent company of Handan Iron and Steel Co. Ltd<600001> for a 4.6-million-ton steel project, in which RMB 12 billion will be invested.

Baosteel shares surged almost 62% in the past three months to closed at RMB 17.45 yesterday.

SinoSteel to acquire stakes of ZCE in Zimbabwe

SinoSteel Corp, China's second largest iron ore dealer, has agreed to pay US$200 million to acquire 50% stake of Zimasco Consolidated Enterprises (ZCE), a subsidiary of the largest ferrochrome producer Zimasco Ltd in Zimbabwe, according to Shanghai Daily.

Zimasco owns the largest chrome ore resources in Zimbabwe and its chrome ore reserve is 4 or 5 times that of China. As ferrochrome is one important material to combine iron and chromium in the production of steel, SinoSteel has inked contract with Zimasco to invest in ferrochrome mines and smelters.

State-owned SinoSteel is expanding into making materials such as ferroalloys used in steel producing, in order to meet the growing demand in China for steel. It has successfully taken over Jilin Ferroalloys Group Corp, China's largest ferro-alloys firm after its acquisition of Zuyi Ferroalloy Factory.

The company is also planning to list on both Shanghai and Hong Kong bourses next year to raise US$1.5 billion to fund further exploration.

Citic ranks 4th-largest securities firms worldwide

Citic Securities<600030> is now the world's fourth largest securities company with a market capitalization of US$40.7 billion, while China's Haitong Securities<600837> is ranked in the eighth position with US$22.1 billion. Only Goldman, Morgan Stanley and Merrill Lynch remain ahead of Citic.

Taking into account global banks with securities arms, Citic ranks the eighth behind Citigroup Inc, JP Morgan, Chase & Co, a Zurich-based UBS AG and the Credit Suisse Group.

Growing by more than threefold this year, Citic Securities is currently the fastest-growing brokerage firm in the world, fueled by the booming Chinese stock market. The company was founded 12 years ago. After years of development, it has now overtaken Lehman Brothers Holdings Inc, Bear Stearns Cos and Charles Schwab Corp, by US$8.8 billion, US$24.4 billion and US$16.4 billion respectively, in terms of market capitalization.

China's benchmark CSI 300 Index soared 163% in 2007. A total of 46 million trading accounts had been opened in China this year, which enlarged the number of total accounts opened to 125 million, nine times the amount obtained in the previous year.

Price of Citic's share rose 3.2% in Shanghai on Wednesday, while Haitong<600837> jumped 9.5%.

China Oilfield to commence on trade in Shanghai on Fri

China Oilfield Services Limited (COSL)<601010>, a branch of China National Offshore Oil Corp (CNOOC) <883>, announced that the company had raised a total of US$899 million and will make its debut in the Shanghai Stock Exchange this Friday.

The initial offer attracted RMB 2.17 trillion in subscribers, distributed between retail and institution investors. China Oilfield sold 500 million A-share valued at RMB 13.48 per share, amounting to 11.1% of its expanded capital share. The price of the share was valued at the higher end of the indicative range.

The A-share sales was set at a 13% discount from its shares in the Hong Kong market, which closed at HK$16.10. The sales volume distributed to retail and institution, reached 350 million and 150 million respectively.

Proceeds raised from the IPO, will be used for the purchase of drilling and exploration equipment, as well as the construction of new vessels.

CNOOC is the largest shareholder of China Oilfield, with a 54.73% stake after the IPO.

ANZ buys 19.9% stake in Shanghai lender

Australia and New Zealand Banking Group Ltd (ANZ), Australia's third-largest lender, bought a 19.9 percent stake in Shanghai Rural Commercial Bank (SRCB) for US$263 million, according to a statement released by ANZ on Wednesday.

ANZ will be providing technical assistance to the Shanghai bank, including a specific program over the next three years through a US$5 million technical support fund.

By introducing ANZ as a strategic partner, the Shanghai bank will be able to leverage on ANZ expertise in a wide range of relevant areas, to alleviate the bank's standing into become a leading retail bank in Shanghai.

Sources revealed that Bob Edgar, senior managing director at the Melbourne-based bank, and Alex Thursby, managing director for the Asia-Pacific branch, will be joining the Shanghai lender's board of directors.

In 1986, ANZ first set foot in China as the first Australian lender.

The Shanghai-based bank is ranked in the 17th position amongst all Chinese lenders, with a total asset of RMB 137 million (US$17 billion). Currently, the bank is operating 330 branches and over 380 ATMs across Shanghai. It has approximately 2.5 million retail customers.

CNOOC to bridge alliance with AVEVA

China National Offshore Oil Corp (CNOOC) and AVEVA Group, a holding company that is also engaged in the marketing and development of software and engineering solutions, have entered into an alliance, for the development of an integrated system solution, to be employed by the Chinese company.

In 2005, CNOOC adopted a service solution system provided by AVEVA and was very satisfied with the company's deliverance and implementation of advanced technology. After successive projects, CNOOC has gained much confidence in AVEVA and targets to introduce state-of-the-art technology into the operations of the oil and gas industry in China.

President of AVEVA Asia Pacific, Peter Finch, announced that the company looks forward to more cooperation opportunities in the near future and the union of the two established firms will be beneficial to all.

Earlier this month, both companies met and signed a memorandum of mutual understanding and cooperation in Tianjin, China.

China to focus on 9 high-tech sectors

CHINA will focus development on nine high-tech industries, including biological and new energy, a senior official with the country's top planning body said today.

The industries cover electronic information, biological industry, aviation and space, high-tech services, new energy, new material, ocean industry and the technology upgrading of traditional industries, said Zhang Xiaoqiang, vice minister of the National Development and Reform Commission.

China will soon publish a string of policies to encourage the development of software and integrated circuits, digital TV and biological medicines, Zhang said.

The commission will allocate about six billion yuan (US$799 million) in developing 12 key scientific infrastructures including an exploration ship, Zhang said.

It will also spend 4.8 billion yuan to support the third phase of the Chinese Academy of Sciences' innovation projects, and two billion yuan to promote independent innovation.

The commission will support the construction of 11 national laboratories, 50 working centers and 300 corporate technology centers, Zhang said.

Corporate investment will stimulate the development of the high-tech industry, and as a return, the high-tech products will benefit the companies, Zhang said.

The added value for China's high-tech industry will more than triple this year compared with 2002, a step closer to turning the country's into a high-tech giant, Zhang said.

Industrial added value from high-tech industries accounted for eight percent of China's gross domestic product in 2006, three percentage points higher than 2000, among which the sales from high-tech manufacturers grew 27 percent annually to 4.2 trillion yuan, Zhang said.

The export of high-tech products more than doubled last year to US$281.5 billion, accounting for 29 percent of the country's export volume.

China's export of high-tech products ranked second in the world, Zhang said.

Sandisk plans assembling plant in Shanghai

US-BASED SanDisk Corporation said today it plans to build an assembling and testing plant in Shanghai

The plant, with an investment of US$100 million, is needed to meet the increasing demand for memory cards for mobile phones and cameras.

The world's biggest supplier of flash memory data storage card products entered the mainland market in April 2004.

By the end of last year, China was home to 455 million mobile phone users.

China's Baotou funding Australia iron ore study

China's Baotou Iron and Steel (Group) Co Ltd on Tuesday signed an agreement to provide up to A$40 million ($38 million) to help fund pre-development studies on an Australian iron ore mine, Centrex Metals Ltd CXM.AX said.

The agreement drove project owner Centrex's shares up as much as 24 percent before easing. At 0435 GMT, the stock was 8.3 percent higher at A$0.52.

The agreement with Centrex will give Baotou a half share in the Bungalow iron ore deposit in South Australia if development proceeds, Centrex said.

Baotou already holds 10.13 percent of Centrex and has agreed to buy five million tonnes of ore over five years from Centrex's neighbouring Wilgerup mine when it opens next year.

Baotou's funds for the Bungalow project will help pay for an economic mine feasibility study carried out in two stages of A$8 million each, then a final A$24 million, the company said.

With its rich ores and direct shipping routes to Asia's fast growing economies, and in particular China, Australian iron ore mines are attracting attention among Chinese steel mills hungry for raw feed.

This month, China's Anshan Iron & Steel Group Corp 0347.HK (Ansteel) agreed to help underwrite two new iron ore mines in Australia, as it looks to expand its steel making in China, in exchange for a 12.78 percent interest in Gindalbie Metals Ltd (ASX: GBG.ax) .

Rio Tinto Ltd/Plc (ASX: RIO.ax) RIO.L and BHP Billiton Ltd/Plc (ASX: BHP.ax) BLT.L each are already spending billions of dollars to expand production in the iron ore-rich Pilbara region of Western Australia to keep pace with demand for ore in China.

Their biggest threat may come from Fortescue Metals Ltd (ASX: FMG.ax) , which is seeking funding from China's largest steel maker, Baosteel 600019.SS, and is fighting for access to BHP's railways to become a third force in the Pilbara. ($1=A$1.15)

Oilseed on fast track for growth

CHINA, the biggest user of soybeans and vegetable oil, plans to expand output of oilseed crops by 14 percent.

It will achieve the result through greater subsidies and higher yields, while also boosting stockpiles to help manage surging demand, Bloomberg News reported.

"Boosting production of oilseed crops to ensure supply is an urgent task," the State Council said in a statement on its Website late on Monday. "Our basic principle is to maintain our dependence on domestic sources for supply."

China's soybean output this year may fall to the lowest since 1999 on lower planting and drought, the China National Grain and Oils Information Center said on September 10.

Inflation for edible oils jumped to 35 percent last month on rising demand.

"These polices were well-intended but arrived too late," said Chen Baomin, an analyst at Jilin Grain Group Co in Changchun. "Given the current high prices, farmers will plan more oilseed crops with or without subsidies."

Soybean futures in China, traded on the Dalian Commodity Exchange, rose 27 percent in the past six months on the reduced output and increased demand for oil and soybean meal. They were at 4,083 yuan (US$543) a ton at the end of the morning session.

China to continue attracting foreign investment actively: official

The Chinese government has no problem with too much foreign investment and will continue to attract foreign investment actively, said a senior commerce official on Tuesday.

"China needs to attract more investment, not only to get more funds, but to obtain the competitive strength associated the fund flow," said Vice Minister of Commerce Jiang Zengwei at a forum in Chengdu, capital of southwest China's Sichuan Province.

Jiang said China attracted 69.5 billion U.S. dollars of actual foreign investment last year, only six percent of global transnational direct investment.

Given the relatively heavy employment pressure, the levels of technical equipment and corporate management, China should make better use of the role of foreign investment in improving these aspects, Jiang said.

Airbus spares no effort in its China plan

As of the end of August, 11 mainland carriers were operating 366 Airbus aircraft with 377 still on order. Coping with a growing customer base and providing timely, efficient support and service to Chinese airlines will decide whether aircraft manufacturers such as Airbus can continue their success in China.

Airbus has a network of spares and support centers in Beijing, Frankfurt, Hamburg, Singapore and Washington, DC. It has a spares warehouse valued at more than $30 million in Beijing and contracted another one in Shanghai last year.

Pierre Steffen, Airbus China vice-president for customer services, talks to China Daily reporter Lu Haoting about his new plan to better serve Chinese airlines and the potential of China to grow into a regional hub for customer service.

Q: During last year's Zhuhai Air Show, you said you planned to add something new to the logistics of spare parts supply in China. Could you elaborate on that plan and how it is going on?

A: We are selecting a professional logistics company, an international company with very strong foothold in China, to transport spare parts for Chinese airlines. Usually airlines transport spare parts themselves, which, I believe, is not the best solution.


Globally speaking, a lot of time is wasted during spare parts transportation. Airlines are forced to have a very high level of spare parts because they need to have enough spare parts to counterbalance the negative effects of the long transportation chain. That increases airlines' costs.

With this service, we are able to cut down transportation and transition time, which has a direct positive effect on cutting inventory.

Q: Have you used this service in other countries?

A: The service was developed at our spares support and service headquarters in Germany five years ago. We have introduced this service in Europe, the US and Asia. Now we have 40 airlines using the service globally, including Lufthansa, Singapore Airlines and Austrian Airlines.

Q: Do Chinese airlines welcome this service? What are their concerns?

A: I have solid commitments from senior managers of three Chinese airlines which wish to use the service very soon.

They have the same concerns as other airlines around the world. Most airlines want to take care of their own transportation. They think: 'We are a transporter. So we handle our own spare parts.' But in reality, a lot of time is wasted.

Q: Airbus has a large support center in Beijing and there are already about 25,000 parts stored here. Is it possible for you to turn this support center into a regional hub that serves the whole Asian market?

A: We are working on that. But of course such plans develop step by step.

In fact, over the past 12 years, our hub in Beijing has developed great competences, particularly with the increasing number of Chinese staff. For three years now, some of our experts have been traveling outside China to regions such as Myanmar, Vietnam, Siberia, Indonesia and Cambodia (to serve local customers).

The reason is quite simple. To fly to any Asian country from Europe, it takes at least two travel days, in and out. Then you need to adapt to the time zone and to the climate. And you are still not in the customer's office.

But our guys get into the plane and are in any of the Asian capital cities in six hours. They can start with an evening briefing with the customer. The travel is cheaper and less time is lost.

Q: Which kind of airlines are your experts serving?

A: We are not talking about airlines such as Cathay Pacific or Singapore Airlines, which have a lot of their own capabilities. We are talking about airlines that have the same background as our Chinese start-up airlines. Some of them are beginners. They have limited infrastructure and possibly other constraints.

So to answer your previous question, yes we are already in the regional business. We will gradually further increase our presence in the region, concentrating on support services that make sense regionally speaking.

Q: Are these traveling experts expatriates or Chinese?

A: Chinese. I do not have many expats anymore in my organization. This year alone I have replaced three expatriates for three Chinese, one to one. We are not doing any compromising. We select the right talent in the market.

We are proud that our staff attrition rate for local employees is below 4 percent. It's far below the industry level.

China builds new freeway connecting to Central Asia

Construction has begun on a freeway that will form a key part of a Central Asia highway network between Korla and Kuqa, in northwest China's Xinjiang Uygur Autonomous Region.

The section of China's No. 314 national trunk road was approved by the National Development and Reform Commission, said an official from Xinjing Uygur Autonomous Regional Bureau of Communications.

The four-lane freeway would cover 296.5 km at a budgeted cost of 4.02 billion yuan (503 million U.S. dollars).

The Asian Development Bank will lend 150 million dollars and the central government will pay 1.5 billion yuan (187 million U.S. dollars), while the rest is met by local governments.

Construction would take three years to complete and the road would be open by 2010, said the official.

The freeway was expected to promote economic growth and trade between China, and central and western Asian nations and even Europe, he said.

In a comprehensive initiative on economic cooperation in Central Asia, the ADB listed the Korla-Kuqa freeway as a key investment project for the 2006-2008 period.

The bank provided 600,000 U.S. dollars early last year to finance technical preparations, the bank's first investment project in Xinjiang, which included project design and assessment, and personnel training.

International loans have become a main financing source for the construction of road networks in Xinjiang, China's largest region by area.

The World Bank had provided 600 million U.S. dollars for building roads and upgrading rural roads in the region by the end of 2005.

National Trunk Highway 314, with a length of 1,880 km, goes from Urumqi, capital of Xinjiang, southwards across Mount Tianshan to meet Kunjirap, a land port on the China-Pakistan border.

WTO panel to investigate U.S.-China dispute on IPR protection

The World Trade Organization (WTO)decided on Tuesday to establish an expert panel to probe U.S. complaints that China was not doing enough to protect intellectual property rights (IPR), trade officials said.

The panel decision was automatically made at a meeting of the WTO's Dispute Settlement Body, following a second request by the United States. Washington's first request for such a panel was made last month but rejected by China in accordance with WTO rules.

The United States initiated the case at the WTO in April, claiming that China's legal structure for IPR protection is unfairly deficient and inconsistent with WTO regulations. Consultations between the two sides failed to solve the dispute.

Since April, China has vigorously defended its position, regretting the U.S. insistence in setting up a WTO panel on the case.

For nearly 30 years and particularly since joining the WTO in 2001, China has spared no efforts to improve its IPR legislation, and now the legislation is in full accordance with WTO rules, the Chinese mission to the WTO said in a statement after Tuesday's meeting.

By initiating the case, the United States is actually trying to change the WTO legal structure on IPR protection, with an attempt to impose extra obligations on developing members, the statement said.

It added that China would not accept obligations that go beyond what is prescribed in the "TRIPS" agreement among the 151 WTO members, which covers trade-related intellectual property rights.

The statement reiterated that China would continue to pay much attention to IPR protection, as it is necessary for China's economic development.

As a developing country, China is ready to make its due efforts for promoting worldwide IPR protection, the statement said.

Sinosteel buys ZCE in Zimbabwe

Sinosteel Corp, China's second-biggest iron ore trader, has agreed to acquire Zimasco Consolidated Enterprises Ltd, owned by Zimbabwe's largest ferrochrome producer Zimasco Ltd.

An initial accord was signed with ZCE, as the company is known, on Sept. 19, Beijing-based Sinosteel said on its Website, without providing further details. Sinosteel, one of China's three biggest state-owned traders of steel, is expanding into making materials such as ferroalloys used in steel making, to meet demand in the nation that is the world's biggest producer and consumer of steel, said Bloomberg News.

Ferrochrome combines iron and chromium in the production of steel. Sinosteel agreed in November to invest in a 230 million U.S. dollars ferrochrome mine and smelter project with South Africa's Samancor Ltd.

China aviation fuel firm in alliance with Kuwait

China National Aviation Fuel Holding (CNAF), China's near-monopoly jet fuel distributor, has agreed to cooperate with Kuwait's state oil firm on fuel supplies, a CNAF official said on Tuesday.

CNAF and Kuwait Petroleum Corp, a major jet fuel exporter into Asia, had signed agreements on a strategic alliance and jet fuel cooperation early this month, the official said, adding that the parties had yet to hammer out concrete deals.

It marks the Beijing-based company's second global alliance following a similar one signed in March with Russia's biggest oil producer, state-controlled Rosneft.

CNAF is the parent of Singapore-listed China Aviation Oil, which controls the bulk of China's aviation fuel imports.

Kuwait Petroleum Corp rarely supplies jet fuel directly to Chinese buyers.

Jet fuel demand in China, the world's second-largest oil consumer, has been rising rapidly in recent years amid double-digit growth in the country's air traffic.

About a third of that demand was met by imports and the rest by state refiners.

China to submit 4G telecom standards to ITU between 2008-09

China plans to submit home-grown fourth-generation (4G) mobile technology standards to the International Telecommunications Union (ITU) between 2008 and 2009, according to Wen Ku, director of the Department of Science & Technology at the Ministry and Information Industry.

The 4G technology will enable people to check email and download films and music through mobile phones and PDAs (personal digital assistants) at much faster speed compared with the latest 3G technology.

The ITU announced earlier that it will solicit 4G technology standards from countries all over the world from next year, and that the final technology will be put to commercial use around 2010.

China previously developed a 3G technology of its own, TD-SCDMA, but has not yet issued any licenses to operators because of repeated government delays.

The country currently has already formed an improved TD-SCDMA industry chain, including system, terminal, chip, software and instruments, Wen told reporters at an industry forum here.

He said some advanced services, including wireless streaming media and wireless broadband services, are under preparation based on the current TD-SCDMA network trial in 10 Chinese cities.

Besides that, China has also completed tests on two other foreign-developed 3G standards - WCDMA and CDMA 2000, he said.

But he declined to say when trial networks for the two technologies will be established.

Corn imports remain stable despite growing demand

"As the second biggest corn producer, China's volume of corn imports or exports often causes great fluctuation of the international market. There is a transformation from the basic equilibrium of corn supply and demand to the demand surplus to supply," said Jiang Jianhua, Director of the Chinese Association of Grain Sector.

However, China is making significant efforts to implement policies that are favorable to farmers, hoping to give them initiative to grow corn, according to relevant experts. At present, the sown area of corn is continuously increasing and the output keeps growing every year. However, the consumption of corn used for breeding has also increased steadily. But with the government reducing its subsidies to the intensive processing of grains, the growth of the sector's demand for corn will be restricted to a small margin.

China's corn output during 2007-2008 is expected to be 149 million tons, the domestic consumption 145 million tons, and the surplus 4 million tons, based on forecasting from the China Grain and Cooking Oil Information Center.

China to Continue Attracting Foreign Investment Actively

The Chinese government has no problem with too much foreign investment and will continue to attract foreign investment actively, said a senior commerce official on Tuesday.

"China needs to attract more investment, not only to get more funds, but to obtain the competitive strength associated the fund flow," said Vice Minister of Commerce Jiang Zengwei at a forum in Chengdu, capital of southwest China's Sichuan Province.

Jiang said China attracted 69.5 billion U.S. dollars of actual foreign investment last year, only six percent of global transnational direct investment.

Given the relatively heavy employment pressure, the levels of technical equipment and corporate management, China should make better use of the role of foreign investment in improving these aspects, Jiang said.

Cisco outlines next Web revolution

Senior Vice President Howard Charney of Cisco Systems is a well-educated cove. He believes that a major wave of innovation is due and said, 'No army can withstand the strength of an idea whose time has come.'

It is generally believed he was quoting Victor Hugo. Well, not exactly. It is in the quotation books and, as is often the case, the quotation books are wrong.

Victor Marie Hugo was writing in French and the exact quotation is: 'On resiste a l' invasion des armees; on ne resiste pas a l'invasion des idees.' Which can be translated as: 'A stand can be made against invasion by an army; no stand can be made against invasion by an idea.'

So close, but no cigar.

However, the mistranslation is so widely used that Howard Charney should be forgiven. He was speaking in Australia and thus could be reassured that none of the IT journalists there would have the foggiest idea what the correct quotation should be. Or, indeed, have heard of Victor Hugo.

Howard Charney said that the world was now split into 'information-rich' developed countries and 'information-poor' developing countries. And that it is on the precipice of a major wave of innovation.

His argument is that greater access to information will improve living standards by removing isolation, which will, in turn, stem the growing disparity between productivity growth rates of information-poor and - rich nations - a gap that, according to an Organisation for Economic Cooperation and Development report, has doubled in the last decade.

So where does Cisco come in? Glad you asked that. For developing nations to improve life, they will need networks - Cisco's networks, he hopes - regardless of whether the networks are based on fiber-optic lines or wireless technology.

Then the whole world, like Howard Charney, will be able to misquote Victor Hugo and sound intellectual.

BT Group increases investment in China

Leading telecom operator BT Group will invest at least $70 million in China in the coming years as part of its efforts to more than double revenue in the country by 2009.

(You need to place BT to understand this. BT was once British Telecom and is the privatized UK state telecommunications operator. It is the dominant fixed line telecommunications and broadband Internet provider in the United Kingdom. BT operates in more than 170 countries and almost a third of its revenue now comes from its Global Services division. Sadly, as Wikipedia reports, changing your name does not mean you change your spots. 'Despite this the company has an appalling track record in customer services. Customers hoping to carry out seemingly straightforward procedures like line reconnections can sometimes expect to wait on hold for up to three hours.' Our illustration represents some of its cutting edge technology in London. The phone does not work but the card advertisements stuck around the inside are interesting.)

BT at home may be something of a shambles but its best efforts are overseas.Now it has opened a technology and service center in Dalian and a research and development facility in Shanghai.

Bill Lam, vice-president of BT Global Services' Northeast Asia operation, said, 'We are very committed to pursuing long-term development in China.'

BT has recruited about 60 employees for its Dalian center to provide software development, service delivery and support for clients in China, Japan and South Korea. Its R&D center in Shanghai, the fourth globally, will be used for research and will also provide services to clients in China.

China Extends Period of Loan to Jordan

Jordan and China have agreed to extend the period of the framework agreement on a 200-million Chinese yuan (26.7 million U.S. dollars) concessional loan until the end of July 2009, Chinese Ambassador to Jordan Gong Xiaosheng told Xinhua on Wednesday.

Gong said he and Jordanian Minister of Planning and International Cooperation Suhair Al-Ali signed the Exchange of Letters on Tuesday and that both sides agreed to finance a number of development projects through this loan in the near future.

In recent years, the Chinese government has provided Jordan with more than 66 million Chinese yuan (8.8 million dollars) in low-interest or interest-free loans and donations, and has also helped train Jordanian technicians.

Oilseed on Fast Track for Growth

China, the biggest user of soybeans and vegetable oil, plans to expand output of oilseed crops by 14 percent.

It will achieve the result through greater subsidies and higher yields, while also boosting stockpiles to help manage surging demand, Bloomberg News reported.

"Boosting production of oilseed crops to ensure supply is an urgent task," the State Council said in a statement on its Website late on Monday. "Our basic principle is to maintain our dependence on domestic sources for supply."

China's soybean output this year may fall to the lowest since 1999 on lower planting and drought, the China National Grain and Oils Information Center said on September 10.

Inflation for edible oils jumped to 35 percent last month on rising demand.

"These polices were well-intended but arrived too late," said Chen Baomin, an analyst at Jilin Grain Group Co in Changchun. "Given the current high prices, farmers will plan more oilseed crops with or without subsidies."

Soybean futures in China, traded on the Dalian Commodity Exchange, rose 27 percent in the past six months on the reduced output and increased demand for oil and soybean meal. They were at 4,083 yuan (US$543) a ton at the end of the morning session.

Huawei Signs HSDPA Network Contract With eMobile

Chinese telecom equipment manufacturer Huawei has announced the signing of an HSDPA expansion contract with Japanese network operator eMobile, following the construction of eMobile's HSDPA network.

Under the new agreement, Huawei will provide advanced HSPA technology and will bring the network to Tokyo, Osaka and Nagoya and their surrounding areas. Huawei will deploy more than 2300 distribution Node-B base stations including iDBS to make eMobile's network to cover Tokyo's subway and commercial areas.

Eric Gan, president and chief operation officer of eMobile, has told local media that as a main seller of communications products, Huawei provides high quality products to meet the demand of Japanese market and Huawei's IP mobile broadband solution enables them to provide innovative service to their clients and keep a leading position in the Japanese data service market.

WISCO Signs Power Project With GE

Wuhan Iron and Steel Corporation has signed a strategic cooperation agreement with GE for the company's first blast furnace gas cycle power generation project.

The two sides will carry out cooperation on energy power generation, water processing, industrial electricity and automation, safety, environment protection, iron and steel outsourcing, and management training.

According to the agreement, GE will supply two sets of cycle plant equipment for WISCO which are expected to generate 2.4 billion kilowatt hours of electricity each year and this type of power generation will reportedly help reduce more than 2 million tons of carbon dioxide every year.

Jeffrey R. Immelt, chairman of the board and chief executive officer of General Electric, says this is the largest project that GE has ever invested in Wuhan, which is very important in the company's future development in China. Immelt also says the company's cooperation with WISCO on energy saving and recycling economy conforms to GE's global strategy of Green Innovation.

Parent company to obtain 10% stakes in Shanghai Auto

Shanghai Automotive Co. Ltd.<600104>, China's largest manufacturer of automobiles and related components, announced that its parent SAIC Motor Corp will be obtaining at least 10% stakes in the company.

SAIC had reported in an earlier statement that the company had already notified Shanghai Auto that it will foot RMB 800 million for a minimum of 800 million units.

In July this year, Shanghai Auto announced plans to release six-year-period bonds with detachable warrants, amounting to RMB 8 billion, to raise funds for the company's plans to develop its own brand of car models. Last week, the company decided to issue RMB 8 billion worth of bonds with warrants to existing shareholders, instead of extending it to public investors.

A Chinese partner of General Motors and Volkswagen, Shanghai Auto launched the company's first model in March this year, and has drafted out plans for another thirty or more models in the coming years.

In the first half of the year, Shanghai Auto posted a 358.1% surge in net profits, amounting to US$358 million.

Yutong exports more buses to Cuba

Zhengzhou Yutong Group Co. Ltd<600066>, one of China's leading bus manufacturers in Henan province, has delivered 200 mass transit buses to Cuba.

According to the Sino-Cuban export agreement, Yutong will export 5,348 buses or coaches to Cuba from 2007 to 2009. Yutong will first transport the buses worth RMB 300 million (US$37.5 million) to Lianyugang, a port in North China and then ship them to Cuba.

Yutong began to export coaches to Cuba in 2005 and by late 2006. The company exported over 1,200 coaches to the Caribbean nation. Its market share in the country is 98%, according to sources. It also exports coaches to other countries and regions in the Middle East, Africa and South Asia.

Yutong is a large-scale enterprise group with bus manufacturing as the core business. It also involves in engineering machinery and real estate as well as other investment businesses. The company was listed on Shanghai Stock Exchange since 1997. Yutong gained over RMB 10.14 billion (US$1.27 billion) in sales last year.

Lenovo sets sights on European Market

Lenovo Group<992>, the third-largest PC manufacturer in the world, expressed that the company will proceed to launch its products in the European markets, whether or not the company succeeds in its acquisition of Packard Bell.

Although Lenovo is able to leverage on Packard Bell's presence in Western Europe, the company will proceed with initial plans, to launch mid to high end consumer products in European cities, before the commencement of the Olympics next year.

Lenovo's plan to acquire Packard Bell might not materialize, after Acer's announcement of buying Packard Bell through its recent acquisition of its U.S. unit Gateway. The Taiwanese company intends to exploit Gateway's right of first refusal to buy the parent company of Packard Bell. Should Acer succeed in its acquisition plans, the company would gain a competitive edge and overtake Lenovo's global position.

Chief executive of Lenovo, Bill Amelio, commented that the company is still hopeful of its acquisition plans, in a bid to realize its global vision. Despite its desire to acquire Packard Bell, Lenovo will not enter into any partnerships that might potentially bring instability to the existing operations, as the company is still in the process of integrating IBM into the company's infrastructure, after the acquisition in 2005.

ING IM launches China Access Fund

Hague-headquartered ING Investment Management Asia/Pacific (ING IM) launched the ING China Access Fund on Tuesday for investing only in Chinese companies listed on international exchanges.

This fund will focus on a portfolio of about 30 to 40 mainland stocks, whose share prices nearly 35 times of the earnings.

According to the statement of the company, the China Access Fund will target the leading companies, and invest in small- and mid-size companies which have strong fundamentals or develop much faster than other similar companies.

ING IM expects that China will continuously benefit from rapid and steady economic growth, developing urbanization and industrialization and rising purchasing power.

The fund will provide investors with opportunities to access unlisted Chinese companies, listed companies trading at a steep discount, well-established global companies with large revenue gains from China, and well-estimated China's IPOs on international markets.

ING expects to raise about US$250 million within six months to a year. The China Access Fund will be marketed to private banking clients. It will also be available for general retail sales in Hong Kong.

China State Shipbuilding offers shares for expansion

China State Shipbuilding Co<600150> announced yesterday that it has raised RMB 12 billion (US$1.6 billion) by selling four million shares to eight strategic investors.

The offer price was set at RMB 30 per share, equivalent to one-eighth of its existing share price. The new shares are subject to a 36-month locking period, according to the company's filing to the Shanghai Stock Exchange.

The strategic investors include Baosteel<600019>, China National Offshore Oil Corp, China Life Insurance (Group) Co <601628><2628> and state financial conglomerate CITIC Group.

In the first half of this year, the orders received by China's shipbuilding industry surged 165% over the same period last year, which makes China overtake South Korea as the world's largest shipbuilding country in terms of deadweight tonnage.

In January of this year, China State Shipbuilding Co still hovered at around RMB 30 per share. Since then it began soaring, becoming China's most expensive stock. On Tuesday, China State Shipbuilding dipped 0.38% to close at RMB 248.75.

CNOOC Ltd. announces start-up of gas project in Indonesia

China National Offshore Oil Company Limited (CNOOC Limited) announced on Monday that the phase two of the Southeast Sumatra (SES) gas project has started production.

CNOOC SES Ltd., a CNOOC Ltd. subsidiary, was the operator, said CNOOC Ltd..

The contractual gas delivery rate of the phase two of the project would be 78.4 million cubic feet (approximately 2.22 million cubic meters) per day, but the company did not state the current daily output.

The project is located about 120 kilometers offshore West Java in Indonesia, with an average water depth of 30 meters.

The development facilities in phase two include a production and processing platform, a gas plant, a gas compression and processing platform and three sub-sea pipelines.

The natural gas produced will mainly be supplied to the power plant of the state utility company PT Perusahaan Listrik Negara (PLN).

Liu Jian, executive vice president of the CNOOC Ltd., said the successful start-up of SES phase two would not only boost CNOOC's overseas gas production, but also supply more clean energy to the local people.

CNOOC Ltd. holds 65.5 percent interest of Southeast Sumatra production sharing contract (PSC) and acts as the operator. The PSC partners include Japan's INPEX Sumatra, Ltd., KNOC Sumatra Ltd., Orchard Energy Sumatra BV, Fortuna Resources (Sunda) Ltd., Talisman UK (Southeast Sumatra) Ltd. and Talisman Resources (Bahamas) Ltd..

Phase one of the project commenced production in 2006.

More gas firms allowed to sign foreign contracts

Domestic gas companies will be allowed to sign more global cooperation deals in a move designed to channel funds and technology into China's gas industry.

The State Council has revised a regulation, allowing more "State-designated" companies to set up ventures with foreign partners to jointly explore methane trapped in coal seams.

The revised rule, known as the Regulation for Joint Exploration of Onshore Oil, took effect on Monday, it aims to boost clean fuel output.

China United Coal-bed Methane Corp (CUCMC) used to be the only company allowed to enter into such ventures, based on a 2001 version of the regulation.

"The move will be a shot in the arm for coal-bed methane exploration and production in China, because it will usher in more funds and advanced technology," said Huang Shengchu, director of the China Coal Information Institute.

Many mining companies were opposed to CUCMC's monopoly on foreign-funded coal-bed methane extraction, said Huang. "With the deregulation of the market, that segment will develop further," said Huang.

CUCMC, however, will remain the market leader, with a lead over potential competitors.

"The new regulation will not affect our ongoing projects. And we will continue to tap new resources around the country this year," Sun Maoyuan, general manager of CUCMC, told China Daily.

CUCMC will remain the only firm with foreign partners tapping coal-bed methane for the time being, because "it takes time for the State to let in new players," Sun stressed.

"To further tap coal-bed methane, the State will bring a few new players into the field to test the water. But our potential competitors simply do not boast as big reserves as us, and it will take time for them to develop," Sun added.

Asia American Gas Inc and CUCMC recently won government approval to produce 500 million cubic meters of gas annually in Shanxi Province.

According to statistics from the China Coal Information Institute, China boasts a 37 trillion cubic-meter reserve of coal-bed methane, the third largest in the world, next only to Russia and Canada and equivalent to 45 billion tons of standard coal.

More than 600 coal-bed methane wells have been sunk across the country to date, most of them operated by CUCMC and its shareholder China National Petroleum Corporation.

A sizable investment for a wine project in Laishan, Yantai

Three key projects of Laishan District whose total investment was 645 million dollars were signed in Yantai International Exhibition Center on September 23.

One of the projects was a wine project accounting for 400-500 million dollars. It will set up a wine culture center, a training college, the biggest cellar of our country, trade center and other establishments of trade including a star-rated hotel and a top grade office. 3000-5000 foreign and domestic wineries were attracted to invest. The project aims to form a characteristics trading center combining with wine trading, training for wine professional persons and culture exchanging.

Coal India seeks price hike to boost subsidiary earnings

State-owned Coal India Limited (CIL) has sought an immediate increase in the coal prices by 10% to prevent its subsidiaries Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL) from slipping into red.

The issue was flagged off at a recent meeting in the coal ministry to review the country's coal production during the first five months of the current fiscal-April to August 2007. It was pointed out that India's actual coal production during the period April-August 2007 stood at 158.57 million tones as against a target of 172.25 million tones, indicating a shortfall of 13.68 million tones. The meeting was chaired by the minister of state for coal.

Sources revealed that four out of the various subsidiaries of CIL including ECL, Western Coal fields Ltd (WCL), Mahanadi Coalfield (MCL) and North-Eastern Coalfields (NEC) have registered a negative growth during April-August this year as compared to the corresponding period of the previous year.

On its part, BCCL has seen a marginal growth in coal production of 0.52% during the period. The overall production of CIL during the period was 139.19 million tones against a target of 142.76 million tones, an achievement of 92.6% of the target.

However, on the coal-offtake front, ECL and BCCL have registered a negative growth of 13% and 0.02% respectively during the period April to August. The overall achievement of CIL has been 148.72 million tones, which is 98.6% of the target of 150.81 million tones.

CIL is also much behind its capital expenditure targets set for the period under review. As against a target of Rs 758.93 crore, the overall capex of CIL stood at Rs 485.7 crore in the first five months of 2007-08. Excepting Northern Coalfields (NCL) and South Eastern Coalfields (SECL), all other subsidiary companies of CIL have suffered a negative growth in capital expenditure.

Chinese FM urges stronger Sino-EU partnership

Chinese Foreign Minister Yang Jiechi said Monday that China and the European Union (EU) should jointly solidify the foundation of the Sino-EU strategic partnership, a current priority to ensure the success of the upcoming 10th Sino-EU summit.

During a meeting with foreign ministers of the EU "troika" on the sidelines of the 62nd session of the United Nations General Assembly, Yang urged efforts to advance talks on a cooperation protocol for the Sino-EU partnership and render the process of talks into one that pushes forward the development of Sino-EU relations.

He also called for the two sides to boost dialogue and consultation in line with mutual respect, mutual benefit and the win-win principles in properly addressing global issues together.

The EU ministers, concurring on the significance of the upcoming 10th China-EU summit, said the European side looks forward to exchanging views with China on a wide range of issues to promote comprehensive development of bilateral relations.

The two sides also discussed climate change, Africa, the Iranian nuclear issue.

The EU side expressed appreciation of the important role played by China in providing assistance to Africa and in addressing African issues.

The European ministers also pointed out that no quantitative targets should be set for developing countries concerning climate change.

'Mauritania welcomes Chinese enterprises'

New York -- Mauritania's President Sidi Ould Cheikh Abdallahi said Monday that his country welcomes more Chinese enterprises to conduct cooperation projects.

Cooperation between Mauritania and China has yielded remarkable results and brought important interests to the people of both countries over the more than four decades since the establishment of diplomatic relations, Abdallahi said during a meeting with Chinese Foreign Minister Yang Jiechi at the sidelines of the 62nd session of the United Nations General Assembly.

Yang, for his part, said China wishes to push for the constant development of bilateral friendly cooperation of mutual benefit and continue providing assistance to Mauritania and contribute to the African country's economic and social development.

China would also encourage its enterprises to participate in cooperation in Mauritania's infrastructure projects, Yang said.

Philippine government suspends $329 million broadband deal

A cabinet official has announced that the Philippine government is suspending a $329-million broadband network contract with ZTE, a unit of China's biggest listed telecommunications equipment provider.

The official said President Gloria Macapagal-Arroyo told him to do it. No explanation was given as to why the President ordered the suspension of the project, which was supposed to be funded by a loan from the Chinese government.

But we can look at some sort of connecting facts:

The suspension came two days after the Senate started investigating the contract to build a national broadband network to connect all government offices. Senators wanted to know if the president's husband cleared the way for ZTE to get the contract.

There was a failed attempt by some disgruntled soldiers to mount a possible coup d'etat against the administration.

The son of the speaker of the Philippine congress' lower house. on Tuesday testified before a senate investigation of the contract that the president's husband, Mike Arroyo, told him to back off from the project. The son, Jose de Venecia III, is offering to build the network through his company at no cost to the government.

De Venecia also charged that the head of an elections agency asked for kickbacks from the contractor that bloated the price and that the same official offered him a $10-million bribe to withdraw his company's proposal for the project.

Transportation and communications secretary Leandro Mendoza defended the contract in another senate hearing on Thursday. Mendoza also denied de Venecia's accusations against elections chairman Benjamin Abalos and Arroyo.

Just another day of politics in the Philippines. It will all sort itself out, eventually. And, yes, that is George Bush with Gloria Macapagal-Arroyo seen from the rear. It makes him look very tall.

ING Investment Management launches China Access Fund

ING Investment Management Asia/Pacific (ING IM) announced Tuesday the launch of the ING China Access Fund targeting select investment opportunities in Chinese securities listed on international exchanges.

A press release from the ING IM said the fund will focus on industry leaders, and invest in small- and mid-cap companies with strong fundamentals and whose businesses are exposed to the upside of the Chinese economy.

ING IM believes that China will continue to benefit from dynamic and sustainable economic growth, rapid urbanization and industrialization and increasing purchasing power, the press release said.

ING China Access Fund offers investors access to premier Chinese companies not listed on the domestic A-share market, companies trading at a steep discount to A-shares, well-established global companies which derive significant amount of revenue from China and good quality China IPOs listed on international markets.

Commenting on the launch, Chris Ryan, CEO of the ING IM, said, "We are bullish in the outlook of the Chinese economy, and are convinced that the fund will be able to deliver alpha potential by leveraging our in-depth investment management experience in China. The launch of this Fund underlines our confidence we have had in the long term development of China."

ING IM said the fund is managed by an experienced regional investment team equipped by extensive on-the-ground research resources, and also is well-supported by the Shenzhen-based investment professionals in China Merchants Fund Management Co., Ltd., ING's joint venture in China and the first Sino-foreign joint venture that was granted an operating license.

GM Signs Deal to Export Buick Enclave SUVs to China

General Motors Corp signed a deal worth more than US$800 million to export Buick Enclave sport utility vehicles to China over a four-year period beginning in 2008.

The move announced yesterday will send 5,000 of the SUVs to China per year, boosting the automaker's presence in the world's fastest-growing vehicle market. GM is the market leader in China and sold 876,747 vehicles there in 2006.

The vehicles will be imported by GM's local partner, Shanghai-based partner SAIC Motor Corp, and sold through its network of nearly 400 Buick dealerships in China.

The Enclave, a luxury crossover SUV which debuted this year, is built at GM's Delta Township assembly plant near Lansing, Michigan.

Hundreds of United Auto Workers walked off the job yesterday at the Delta Township plant as the union called a nationwide strike against GM.

In May, GM signed a deal to export US$700 million worth of Cadillacs and automotive components to China from the US The Detroit-based automaker said its China operations already has imported about US$3.5 billion worth of vehicles, components, equipment and machinery from North America during the past decade.

Cisco, China's Haier Announce Cooperation

CISCO Systems Inc announced a deal today with China's largest appliance manufacturer to share expertise in constructing home network technology.

The deal with Haier Group comes as technology and home electronics companies forge ties to profit from the growing integration of the Internet with home entertainment. Microsoft Corp announced a venture in June with Chinese television maker Changhong Electric Co to develop digital entertainment products.

Cisco, the world's biggest network equipment maker, and Haier will share expertise in management and constructing "information infrastructure and home networking systems," the companies said in a joint statement. They gave no details of how their cooperation would work or what products they might develop together.

Cisco will share experience in using network technologies to improve competitiveness, Thomas Lam, the president of Cisco China, said in the statement.

"At the same time, we will deepen our commitment to the market for home and individual users, to provide personalized and innovative networking experiences for consumers," Lam said.

Haier Group, based in the eastern Chinese city of Qingdao, reported global revenues last year of 107.5 billion yuan (US$14.3 billion).

China's Baotou Funding Australia Iron Ore Study

China's Baotou Iron and Steel (Group) Co Ltd on Tuesday signed an agreement to provide up to A$40 million ($38 million) to help fund pre-development studies on an Australian iron ore mine, Centrex Metals Ltd said.

The agreement drove project owner Centrex's shares up as much as 24 percent before easing. At 0435 GMT, the stock was 8.3 percent higher at A$0.52.

The agreement with Centrex will give Baotou a half share in the Bungalow iron ore deposit in South Australia if development proceeds, Centrex said.

Baotou already holds 10.13 percent of Centrex and has agreed to buy five million tonnes of ore over five years from Centrex's neighbouring Wilgerup mine when it opens next year.

Baotou's funds for the Bungalow project will help pay for an economic mine feasibility study carried out in two stages of A$8 million each, then a final A$24 million, the company said.

With its rich ores and direct shipping routes to Asia's fast growing economies, and in particular China, Australian iron ore mines are attracting attention among Chinese steel mills hungry for raw feed.

This month, China's Anshan Iron & Steel Group Corp (Ansteel) agreed to help underwrite two new iron ore mines in Australia, as it looks to expand its steel making in China, in exchange for a 12.78 percent interest in Gindalbie Metals Ltd.

Rio Tinto Ltd/Plc and BHP Billiton Ltd/Plc each are already spending billions of dollars to expand production in the iron ore-rich Pilbara region of Western Australia to keep pace with demand for ore in China.

Their biggest threat may come from Fortescue Metals Ltd, which is seeking funding from China's largest steel maker, Baosteel, and is fighting for access to BHP's railways to become a third force in the Pilbara. ($1=A$1.15)

China reaffirms crude premits to Sinopec, CNPC

China has reaffirmed permits for crude distribution and storage to CNPC and Sinopec Group, two months after their listed vehicles received similar licenses, maintaining dominance of the top two energy giants.

The Ministry of Commerce said on its Web site (http://www.mofcom.gov.cn) that it also granted three licenses to distribute refined fuel and another three for refined fuel storage, which mostly went to independent firms.

Beijing in late 2006 set a new threshold for domestic and foreign-funded firms to apply for distribution rights in the world's second-largest oil market, in line with its commitment upon joining the World Trade Organisation at the end of 2001.

But analysts have said that the country's oil duopoly would most likely stay in firm control of crude licenses.

In late July, the ministry issued the first batch of crude permits totalling five, to firms including Sinopec Corp (0386.HK: Quote, Profile , Research) and PetroChina (0857.HK: Quote, Profile , Research), the listing arm of Sinopec Group and CNPC, respectively.

So far the venture of U.S. giant Exxon Mobil Corp (XOM.N: Quote, Profile , Research) and Saudi Arabia, which are building a refinery with top state refiner Sinopec Corp in southeast China, was the only foreign-funded firm to have won a fuel distribution permit.

Boyuan starts up natural gas based methanol project in Inner Mongolia

Sep. 10, 2007, Boyuan United Chemical Co. held a ceremony for its start-up of 1 million ton/year natural gas methanol project in Erdos, Inner Mongolia.

The project was started construction in Sep. 2004. With total investment of USD 196 million (RMB 1.47 billion), the project includes two production units, one is 400,000 ton/year and another is 600,000 ton/year.

Feedstock will be sourced from the Sulige gas field in Erdos Basin. Boyuan United Chemical has signed long-term natural gas supply contract so that the operation of this project will not impacted by the New Policy of Natural Gas Utilization.

Earlier, NDRC published a new natural gas utilization policy to ban the methanol production from natural gas which was effective since Aug. 30, 2007. Meanwhile, the operating natural gas based methanol plants, or constructed methanol projects, or the constructing projects which signed the gas supply contracts are excluded.

Boyuan United Chemical is a jv between Inner Mongolia based Yuanxing Energy Co.(51.2%), US based Sigma investment co. (33.8%) and Inner Mongolia based Boyuan Investment Group (15%).

Yuanxing Energy's another subsidiary - Sulige Natural Gas Chemical Co. - is operating an 180,000 ton/year methanol plant in Erdos. The company is constructing a new 150,000 ton/year naural gas based methanol project in the same site.

China has moved towards the high coal-price era

Chinese leading analysts in various industries have recently made optimistic forecasts on the Chinese coal industry, believing that the high coal-price era will continue in China in the coming years, due to the following four critical factors.

First, regrouping strategy. China will continue to implement the regrouping strategy to allow coal producers to be bigger and stronger, by means of resource and enterprise consolidation, leading to setup of six to eight 100-million-ton-class and eight to ten 50-million-ton-class coal conglomerates.

Also, China will shut down 2,000 more small coal mines in the second half of this year, which may help curb the excessive growth of coal supply and raise the industrial concentration ratio.

Second, robust coal demand. Coal demand remains robust in 2007 as a whole, by coal-consuming industry, the coal demand in the steel, power, chemicals and building materials sectors will grow 12 percent, 10 percent, 5-7 percent and 7 percent, respectively. Overall, the growth rate of coal consumption in the four major sectors will reach 9-10 percent in 2007, and this pattern is expected to remain unchanged in the coming five years.

Third, China's switching to a net coal importer. It is expected that China will continue to be a net coal importer in a fairly long run, subject to higher import prices driven by higher petroleum prices.

Fourth, policy-related costs. New policies have been pushing up coal costs. For example, the coal resource loyalty policy that took effect this March, increased coal costs by 30-50 yuan/ton, in addition to policies such as mine environment compensation and sustainable development fund.

Nigeria: Coal Consortium Spends $7bn to Boost Power Generation

A Nigerian Coal-to-Power Consortium made up of Western Goldfield Limited and Sinocoal Limited of China has concluded plans to elevate power generation in the country by building 9 power stations with installed capacity of 5, 000 megawatts at the cost of $7 billion.

Speaking to journalists in Abuja at the weekend after meeting with President Umaru Yar'Adua, the leader of the Group and Vice President of Sinocoal, Mr. Liu Jianjun said the project is aimed at kick starting an industrial revolution in the country using coal as source of energy to generate electricity.

The project he noted is divided into phases, adding that the first phase involve the building of the power plants and the development of 9 environmentally friendly coal mines in designated coal fields across the country.

According to him, "The Group has identified power as a catalyst for industrial growth. We have gone ahead to lay out plans for energizing the country with low cost electricity. Our aim is to create an enabling environment for unprecedented industrial growth in Nigeria."

He further disclosed that new power transmission lines would be built to carry the power generated into the national grid.

Jianjun further revealed that the first phase of the project to be completed within 36 months would start in January 2008 with drilling seismic exploration, to be followed by mining operations in the coalfields.

The group said it has also made plans to build new towns before hand to discourage the growth of shantytowns resulting from the myriads of activities that will come with the take off of the projects.

Other complimentary projects to be directly established by the consortium include cement factories, coal carbonization plants, iron foundries, glass making, plasterboard manufacturing, agriculture and aquaculture.

Coal, iron ore shipping rates hit records amid vessel shortage

Coal and iron ore shipping rates may extend gains to records this week on rising demand to transport raw materials across the Pacific and the Atlantic amid a limited supply of vessels.

The Baltic Dry Index, an overall measure of commodity shipping costs on different routes and ship sizes, advanced 3.9% to 8,956 on Sept 21, setting a record for a second day, according to data on the London-based Baltic Exchange. This year, the measure has broken records for a total of 83 days.

"There seemed to be no stopping the market as it rocketed" in both the eastern and western regions last week, London-based shipbroker Galbraith's Ltd said in its report. The Baltic Dry Index "is threatening to break through the 9,000 barrier."

Charter rates for tankers have more than doubled in the past year, boosted by rising demand for raw materials led by China, the world's fastest-growing major economy.

Congestion in major ports, including Australia's Newcastle, the world's biggest coal- export harbour, has supported dry-bulk shipping rates. The North American grain export season is helping boost charter rates, which are typically strongest in the fourth quarter.

"It has been an active spot market from Brazil to the Far East as well as for round voyages in the Pacific,"for the panamax market, Oslo-based shipbroker Pareto Dry Cargo AS said in its Sept 21 report.

A panamax carries as much as 70,000 tonnes of coal, iron ore or grain.

The Baltic Dry Index jumped 7.9% last week, helped by gains in the futures market, shipbrokers, including Lorentzen & Stemoco AS, said.

In the market for Freight Futures Agreements(FFAs), the October contract rate for a panamax carrier on the trans-Pacific route jumped 11% last week to US$77,813 from a 4.3% slump the week before. FFAs are used to speculate on or protect against swings in the cost of transporting commodities.

PetroChina to produce 1.6 bln tons of oil from Nanpu Oilfield

PetroChina<857>, China's leading oil producer, related that the proven oil reserves at the offshore blocks of the Jidong Nanpu oilfield, is estimated to reach 1 to 1.6 billion tons.

With the inclusion of reserves from the onshore blocks, the total proven reserves on the Nanpu oilfield is expected to reach 2 billion tons.

However, these projections require another five to six years before the figures can be finalized. Meanwhile, exploration works have to be conducted alongside excavation endeavors on the existing proven reserves. With the present estimations, PetroChina is equipped to reach its target of 10 million tons annual output by 2012.

Situated at Bohai Bay, a geologist with the Chinese Academy of Engineering commented that the existing exploration efforts have yet to tap into half of Bohai Bay immense resources.

In 2006, China produced 183.68 million tons of crude oil and imported 138.84 million tons. Net oil imports increased by 4.1% from the previous year, accounting for 47% of the total consumption of the country.

Cisco to establish wireless network in Shanghai

Cisco, the leading networking equipment provider, announced it is in talks with the Shanghai municipal government to build a wireless broadband network in the downtown for the World Expo 2010 under the project "mega city" on Sunday.

The mega city, described as wireless connected and green city by its vice president and chief development officer Charles Giancarlo, could support high-definition video transfer and would connect government-authorized networks in areas like traffic control, security monitoring and environmental regulation.

Six cities in China are developing wireless network projects. Among them, Beijing is using Wi-Fi and WiMax technologies to construct a wireless network for Olympics Games held in 2008. Shanghai is testing a wireless network for Formula One races in Jiading District. Cisco prefers to apply WiMax for its wireless networks.

After Cisco's first presence in Beijing in 1994, it has established several branches, representatives and a R&D center in 10 cities. It has invested US$155 million in China for R&D and will continue to increase investment in China, including the expansion of its R&D center in Shanghai.

China's soybean import may hit new record

As the largest soybean consumer, China's import of soybean may hit record high next year since the domestic harvest falls and overseas purchase may rise from 28.5 million tons to 34 million tons in the marketing year from October, said Zhu Yufeng, general manager of Louis Dreyfus Corp’s Beijing office in a conference in Shanghai.

China's soybean could fall from 15.5 million tons last year to 13 million tons this year due to the increasing corn and cotton planting. The harvest is expected to fall to 14.4 million tons this year, according to the China National Grain and Oil Information Center. The soybean oil is estimated to increase only by 230,000 tons, while the import of soybean might increase greatly.

According to the statistics, import of soybean in the first eight months was about 19.8 million tons, up 2% year-on-year. China will reduce soybean import tax from 3% to 1% for 3 months to increase imports. China mainly imports soybeans from the U.S. and Brazil, which may support Chicago soybean prices. Dreyfus will boost imports soybeans into Asian regions because of the high domestic prices, Zhu said.

Honda plans to sell 400 Civic hybrids annually in China

Dongfeng Honda, the joint venture of China's Dongfeng Motor Corp<600006><489> and Honda Motor, plans to sell only 400 units of the imported Honda Civic hybrid by the end of this year, a senior executive at the company told the sources.

The forecasting annual sales volume of the model is much lower than the company's original goal of selling 500 to 1,000 units annually.

Honda Motor becomes the second automaker followed Toyata Motor to offer hybrid cars in China.

Mitsuru Ozaki, general manager of Dongfeng Honda, said the price of Civic hybrid had not been confirmed, but it would be higher than the price of Toyota Prius. The current price of Toyota Prius is about RMB 300,000 (US$40,000) per vehicle.

Mitsuru did not expect the company could make any profits through this business since the higher price may scare away customers.

However, Honda Civic hybrid will help to promote the image of the company through the cutting-edge technology and environmental-friendly products.

China's communications market grows 11% in 1st 8 months

According to a report published by China's Ministry of Information Industry (MII), the country's communications sector drew revenue of RMB 523.47 billion in the first eight months of the year, reflecting a growth of 11% from the same period in 2006.

The survey conducted comprised of postal and telecom services. A further breakdown revealed that the telecoms sector grew by 10.7%, whilst the postal sector grew by 14.3%. The total revenue in the sectors amounted to RMB 475.29 billion and RMB 48.18 billion respectively.

During the period of the survey, the number of fixed line users grew by 4.64%, totaling at 372.45 million. By the end of August, the number of mobile phone consumers reached 515.67 million, an increment of 54.59 million from the previous year.

In China, the number of mobile messages sent, scaled to 378.51 billion during the eight months period, a rise of 38.3% from 2006.

Japan Willcom, China Netcom to cooperate in telecoms

Japanese mobile provider Willcom Inc may cooperate with China Netcom<906>, the second largest fixed-line operator in China, to expand its low-cost phone business in Asia, Nikkei Business Daily reported on Sunday.

Willcom will provide the "packet communication" technology, which makes the mobile phone service operator to charge the users for the amount of data transmitted rather than for monthly tariff. The two companies are also planning to provide roaming service before the 2008 Beijing Olympics to satisfy the demand from Japanese subscribers for visiting the event.

Willcom offers the simpler and cheaper personal handy system (PHS) in Japan, which is quite popular in Asia. But in China PHS communications are limited to telephone and e-mail, without internet access. China Netcom, who has about 30million PHS subscribers, is considering introducing PHS services with internet access.

Willcom is ready to sign a technology consulting agreement with China Netcom and send engineers as needed.

Sino-Nepal optical fiber cable project signed

The state-owned China International Telecommunication Construction Corporation and the state-owned Nepal Telecom have signed the Execution Contract of Kathmandu-Khasa Fiber Cable Laying Project on Sunday for optical fiber cable project connecting China and Nepal.

A total of RMB 25.4 million will be invested in the project for building a 125-km optical information super highway connecting China, Nepal and India. The project is expected to start in November and will be completed in mid 2008. The Chinese government will add the project under the agreement on Economic and Technical Cooperation between China and Nepal signed in December, 2003 and the Exchange Letters between two governments in August, 2004.

Nepal is lagging behind in network infrastructure construction. Its network can only be connected by satellites, which results in low speed and high prices of network usage. With the completion of the project, the network development in Nepal will be further improved and people will get more communication convenience through the link.

Double-digit export growth forecasted

The Board of Foreign Trade (BOFT) said yesterday Taiwan's exports will register a double-digit growth in 2007, dismissing forecast by a local think tank saying the island's exports will only grow by 7.41 percent.

"That figure is a little conservative," said officials of BOFT, which falls under the Ministry of Economic Affairs.

BOFT officials made the prediction after Chung-Hwa Institution for Economic Research forecasted that Taiwan's exports and imports will register a growth of 7.41 percent and 6.43 percent, respectively, this year.

Exports this year will total US$240.62 billion, while imports will amount to US$215.75 billion. The trade surplus will increase to US$24.87 billion this year from US$21.31 billion last year, according to the think tank.

But the BOFT disagreed with that forecast.

BOFT officials said that Taiwan's exports in the second half of the year have always fared better than in the first half. This, coupled with the Executive Yuan's export stimulus program, will benefit Taiwan's manufacturers and ensure a double-digit growth, they said.

The board further said China's continued economic growth and the U.S.' slow yet steady economic recovery will contribute positively to Taiwan's economy, adding the government is expected to announce more economic incentives in the run-up to the presidential election in March next year.

Overall, bureau officials said Taiwan's total trade would drop slightly compared to last year as the subprime woes in the United States and surging oil prices have devastated the global economy. Yet trade surplus is expected to increase for the year, they said.

Driller to float

Cjina Oilfield Services Ltd, the world's best-performing oil and gas drilling stock this year, will raise 6.74 billion yuan (US$898 million) selling shares in Shanghai to fund the purchase of ships and drilling equipment.

The company will sell 500 million shares at 13.48 yuan apiece, the top end of its pricing range, China Oilfield said in a Hong Kong Stock Exchange statement yesterday. The company's Hong Kong-traded shares have more than doubled this year.

HK carrier aims for major stake

Cathay Pacific Airways Ltd plans to bid for a major stake in China Eastern Airlines Corp, the Daily Telegraph reported, without saying where it obtained the information.

The Hong Kong-based carrier is expected to make an announcement this week that it's making an offer for a large stake in China Eastern, which is valued at about US$4 billion, the Telegraph said on its Website.

Cathay Pacific may enlist the support of Air China Ltd, the country's largest state-owned airline and the owner of 11 percent of China Eastern's Hong Kong-listed shares, the report said. Cathay's spokeswoman Carolyn Leung declined to comment.

China Eastern agreed to sell a combined 24 percent stake to Singapore Airlines Ltd and Temasek Holdings Pte for US$918 million on September 2, Bloomberg News said.

Air China's parent may try to rally support from other shareholders to block the SIA deal, Citigroup Inc's analyst Ally Ma said in a report last week.

Jet engine pact

Cina's BOC Aviation has signed a US$340 million deal with International Aero Engines to buy its V2500 engines, company sources said.

The engines will be used to power 20 Airbus aircraft for BOC Aviation. IAE has supplied engines for 46 Airbus A320s ordered by BOC Aviation, formerly known as Singapore Aircraft Leasing Enterprises.

CCSA Making Standard For Communications Products

China Communications Standards Association has set up the Special Task Team for Environmental Protection in response to the European Union's proposals on e-waste.

The Special Task Team for Environment Protection is mainly engaged in the study of a standard for recycling e-waste and the standard for testing harmful chemicals in electronic products. Of those, the standard for testing harmful chemicals on electronic product is a compulsive one. This means that once this standard is put into force, all the communications products must be tested first before they can go to market. In this sense, the standard is close to the EU's relevant dictates and helps reduce the loss that Chinese companies often suffer when exporting their communications products to the European countries.

With the EU's implementation of waste from electrical and electronic equipment (WEEE directive) in August 2005 and The Restriction of the use of certain Hazardous Substances in Electronical and Electronic Equipment (RoHS directive) in July 2006, the cost for the relevant electronic products has increased by as much as 10%. As a result, many Chinese companies have been barred from exporting their electronic products to the EU countries. Local media reports that China's Guangdong Province alone loses several million dollars each year due to these two directives.

China Communications Standards Association is an authoritative standard making organization that enjoys high reputation in China's communications field. The establishment of the Special Task Team will enable it to supervise and evaluate the environment testing capacities of the domestic communications testing institutions.

Lenovo digs deeper into the Chinese PC market

When you already have 36 per cent share of the Chinese personal computer market, maybe the only way to go is down. Down-market, that is.


Lenovo executives are justifiably proud of their success in retaining their dominance in the Chinese market, even as the Beijing-bred company digests the IBM PC unit that it bought for $1.75bn in 2005.

Taiwan market: Chunghwa Telecom launches Visa payWave service

Chunghwa Telecom (CHT) on September 19 announced the launch of Visa payWave, a contactless credit card payment service based on NFC (near field communication), through cooperation with Visa, Nokia and the local Chinatrust Commercial Bank.

Initially, 500 CHT subscribers with Nokia 6131i handsets will be able to access the Visa payWave service which is available at nearly 3,000 retail stores around Taiwan, CHT pointed out.

In addition, CHT will adopt the SWP (Single Wire Protocol) standard developed by the GSM Association to further its NFC applications, the company indicated. Following the finalization of SWP slated for November 2007, commercialization of the standard will take some time and CHT will offer a series of services progressively in the interim, CHT pointed out.

In other news, CHT has 380,000 subscribers of FTTx (fiber to the building/home) at download speeds of over 10Mbps as well as 1.92 million subscribers of 3G mobile communication services currently, and expects the numbers to increase to 500,000 and 2.20 million, respectively, at the end of this year, the company has detailed.

CNOOC, COSCO team up to exploit energy resources

China National Offshore Oil Company Limited (CNOOC), the country's largest offshore oil and gas producer, has signed an agreement on exploiting energy resources with China Ocean Shipping (Group) Company (COSCO Group), China's largest shipping group.

The two sides have agreed to jointly exploit energy resources including liquid natural gas (LNG) by transferring CNOOC shares to COSCO Group or co-funding, CNOOC, the country's third-biggest oil company has said in an announcement on its website.

The two companies will also cooperate on shipbuilding, according to the announcement.

CNOOC and COSCO have been cooperating on transportation of crude oil, oil products, LNG, natural gas pipes and other facilities.

"We are complementary to COSCO in business and prospects for mutual cooperation are promising," said Fu Chengyu, chairman and chief executive officer of CNOOC.

CNOOC has reported first half net profits down by 10.6 percent from the same period last year to 14.55 billion yuan.

COSCO Group is China's largest ship repair and marine engineering and shipping group and one of the top shipping conglomerates in the world.