Corn futures looking good

Corn futures contracts on the Shanghai Futures Exchange, SHFE, today surged for the third trading day with the most actively traded contracts jumping an aggregate 3.5 percent, reflecting rising expectations amongst traders.

The most actively traded corn futures contracts for delivery in May 2008 rose 0.95 percent yesterday to close at 1,707 yuan per ton. Since last Friday, the contract price has soared 58 yuan per ton, or 3.5 percent. The trading volume of contracts for delivery in May reached 1.29 million hands, a 300 percent increase from last Friday.

The contract price had reached the historic high of 1,774 yuan per ton on May 24.

Analysts said that the overall bullish performance in the agricultural produce futures over the past few months helped push up corn futures prices. What's more, the continuous weakening of the US dollar and surging crude oil prices have heightened interest in agricultural produce. Industrial experts said vigorous economic growth in China has contributed to escalating prices of a wide range of agricultural produce domestically.

Other major futures contracts on agricultural produce including soybean, soybean oil and soybean meal yesterday showed a slight price decline after rising continuously over the past several weeks. Analysts said it was nothing but a necessary correction and yesterday's price drop would not change the long term upward climb.

The most actively traded soybean meal futures contracts for delivery in May 2008 on Dalian Commodity Exchange fell 0.21 percent to close at 3,337 yuan per ton. Meanwhile yesterday, soybean futures contracts for delivery in January 2009 shed 1.35 percent to close at 4,078 yuan per ton.

China's home brands cars account for 27% of total sales

Chinese automakers sold 940,300 cars with their own brands in the first three quarters of this year, or 27 percent of the country's total car sales, sources with the China Association of Automobile Manufacturers said on Tuesday.

Sales of the top 10 home brands, including QQ, Xiali, F3 and A520, amounted to 683,300 cars, or 73 percent of the total sales of home brands cars, for the nine months.

Earlier reports said between January and September, 4.58 million passenger vehicles were sold nationwide, up 23.84 percent on the same period of last year.

The figure included 3.44 million cars, up 25.76 percent, 251,700 sports-utility vehicles, up 51.7 percent, and 165,300 multi-purpose vehicles, up 20.75 percent.

Baosteel profit growth falls 50%

Shares in China's largest steelmaker Baosteel fell 1.31 percent after it posted a drop in net profit growth of 49.68 percent for the third quarter.

The company attributed the profit downturn to the poor performance of the stainless steel product segment, which accounted for 11.43 percent of the group's total revenue. Baosteel's share price plunged 6.5 percent in the morning session as many stockbrokers downgraded its annual profit growth estimate.

Baosteel posted a net profit of 2.38 billion yuan from July to September, down from 4.75 billion yuan in the same period last year. Its earnings per share dropped 48 percent to 0.14 yuan. Its net profit in the first nine months was 11.4 billion yuan, up 15.3 percent from the year before.

"The falling sales price of stainless steel products from May and high purchase prices caused the poor performance in that area," Chen Ying, board secretary of Baosteel Co Ltd, said yesterday.

The sales price of stainless steel has dropped 35 percent since May, said Chen. According to a report from China International Capital Corp Ltd, Baosteel's loss on its stainless steel products business is estimated to be 1.52 billion yuan for the third quarter.

"The price of stainless steel and nickel is expected to rise in the third quarter, a new production line has been put into operation and the company's product structure has improved. So Baosteel's performance is expected to lift in the fourth quarter this year," said Fu Zhongzhe, general manager of Baosteel Co Ltd.

China Mobile denies plans to acquire stake in South Africa's MTN Corp

China Mobile Ltd has denied media reports saying it plans to acquire a stake in MTN Corp, South Africa's biggest mobile telecom operator.

'The listed company has nothing to do with this, and as far as we know the parent has had no dealings relating to any plan to buy MTN,' said a company spokeswoman.

China's largest mobile phone company is majority-controlled by China Mobile (nyse: CHL - news - people ) Communications Corp.

Shanghai Securities News reported that China Mobile is expected to buy a stake in MTN, citing sources. The report did not give details.

China Mobile is the larger of the two mobile phone carriers on the mainland.

The company last week announced its net profit for the first nine months grew 29.8 percent from the same period a year ago on strong subscriber growth.

Its 9-month net profit stood at 59.88 billion yuan, up from 46.13 billion a year earlier.

Carmakers express pessimism for the market

Local car companies have expressed pessimism for the market, saying a decline in sales may continue into 2008.

They made the remarks after Minister of Economic Affairs Steve Chen Monday urged people to "replace big cars with smaller ones" in response to surging oil prices. His statement that "3,000cc vehicles are small" caused an uproar in the public, with people criticizing Chen for a lack of understanding of their pain and suffering amid an inflation.

Responding to Chen's remarks, auto companies said a replacement cycle is unlikely to be seen next year.

They said Taiwan's car market enjoyed a peak in 2005, when 514,000 new vehicles were sold, thanks to the huge popularity of sports utility vehicles.

Yet in 2006, sales began to decline due to increasing oil costs and accumulating card debts that severely impacted the Taiwanese economy.

And the downward trend has continued into 2007, as market analysts are slashing sales estimates from between 350,000 and 360,000 to between 320,000 and 330,000 after car companies such as Hotai, Yulon, and Ford lowered their sales targets.

China Motor Corp., distributor of Mitsubishi vehicles in Taiwan, is even more pessimistic as it expects total sales by automakers in Taiwan to fall below 320,000 this year.

Worse yet, China Motor said there is no sign showing the bearish market will end anytime soon. It said next year, sales of new cars in Taiwan would fall by another five to ten percent, translating into below 300,000, the lowest in 20 years.

According to China Motor, international oil prices may soon reach US$100 a barrel, and local gasoline prices may soon top NT$30 a liter, creating a psychological impact on drivers, who are reluctant to buy new cars in spite of the efforts of carmakers to hold prices.

Furthermore, China Motor said next year there will be a presidential election, an event that could cause further political and economic instability, forcing consumers to forgo plans to get new vehicles.

While China Motor expressed pessimism, Hotai, distributor of Toyota vehicles in Taiwan, expressed a different view, saying sales volume will pick up next year to 360,000.

The company said a major political breakthrough will come after the presidential election next year, adding the opening of direct cross-strait flights that will result from the election will boost the economy and stimulate the car market.

Africa-China cooperation in ICT win-win

A senior official of the International Telecommunication Union (ITU) has said that the information and communication technology (ICT) cooperation between China and Africa will lead to a win-win result.

"Chinese companies like Huawei, has signed a memorandum of understanding with the ITU to have many training initiatives for Africa. Such training is not only good for Africa's economy, at the same time it will help the firm to expand the market," Sami Al Basheer Al Morshid, director of ITU Telecommunication Development Sector, told Xinhua Tuesday in an exclusive interview.

Under the MoU, Huawei and the ITU will work together to improve connectivity in the rural and remote areas in emerging markets, as well as to close gaps in broadband backbone networks.

Al-Basheer echoed the view of Chinese officials of the Information Industry Ministry by saying that China, as a developing country, has similarities with developing countries in Africa and owns rich experience in ICT development from the perspective of a developing country.

The director said that Africa needs all kinds of capacity building, such as the training for both students and teachers, and capacity building and e-learning are a key factor to promote the development in the continent where tens of developing countries gather.

He said it is a global collaboration that China helps Africa.

Al-Basheer was here to attend the Connect Africa Summit held on Monday and Tuesday, an event organized by the ITU and several other prestigious organizations, aimed to enhance telecom connection on the continent.

COSL profits from expanding market

Offshore services provider China Oilfield Services Ltd (COSL), has posted a third-quarter net profit of 604.1 million yuan ($80.8 million), a 73.3% increase on the same period in 2006.

COSL said turnover in the quarter increased 38% year-on-year to 2.29 billion yuan.

Meanwhile, net profit for the year's first nine months rose 66.8% to 1.69 billion yuan, on the back of higher drilling rates and a 16.9% increase in operating days of its drilling rigs.

COSL said the expansion of the geophysical data collection market, an increase in operations, the application of new equipment and high-tech materials and the implementation of effective cost controls also helped drive profits higher.

China to expand oil import quota of non-state traders by 15 pct in 2008

The Ministry of Commerce announced on Oct. 29 that non-state traders in China will be allowed to import 19. 15 million tons of crude oil and 10.65 million tons of oil products in 2008, both increasing 15 percent over the quota of last year.

As compared with more than 100 million tons of crude oil import and 30-40 million tons of oil product import and the huge demand on the Chinese market, the import quota of non-state traders is really very little, and can not have an influence on the entire market supply and price, said Niu Li, senior analyst with the Economic Forecast Department of the State Information Center.

The current situation that international oil price has been hovering at a high level and much higher than domestic market, has more thwarted the non-governmental enterprises' zeal to import crude oil and oil product.

According to China's policy, the crude oil imported by non-state traders can not be sold on the market freely unless it is licensed by PetroChina or Sinopec, two state-owned oil giants.

Statistics show that in the five months of this year, China's private enterprises imported 3.294 million tons of oil products, only making up one-third of this year's import quota.

Now the import of private oil enterprises is thwarted on one hand, and the shortage of oil supply has re-emerged on the other hand. International oil price has topped 93 US dollars recently, but China's oil product which is controlled by the National Development and Reform Commission, remains unchanged.

The shortage of oil supply in part areas can not reflect the entire supply in China, said Niu Li, adding that China's oil product supply and demand is balanced generally.

China's oil output and import are big enough to meet the domestic market demand, which has basically grown 7-8 percent annually in the recent years, said the analyst.

In a short term, Chinese government will not take a measure of adjusting up oil produce, but it is more likely to ease the supply pressure through price subsidy, the analyst added.

Chinese Province Has First Power Plant after Successful Trial

The capital of Central China's Hunan Province, Changsha, has finally obtained its first power source in history with the Huadian Changsha power plant. The plant's Unit 1 passed its 168-hour trial operation and went into commercial operation October 23, 2007.

Huadian Changsha Power Plant is in Wangcheng County, about 37 kilometers from downtown Changsha. The project is wholly owned by China Huadian Corporation (Beijing, China), one of the top five leading power producers in China. Construction began in December 2005. The company plans to build two 600-megawatt (MW) supercritical coal-fired units in Phase I and two 1000-MW ultra-supercritical coal-fired units in Phase II. The project will also be furnished with a flue gas desulfurization device and a de-nitration device.

Hunan Huadian Changsha Power Generation Company Limited (Hunan), a subsidiary of China Huadian Corporation, has strengthened its process control through scientific organization, innovative management and continual optimization. The project has achieved great performance in various aspects of safety, quality, progress and cost. It took only 22 months from the beginning of construction until the first unit went into operation. The desulfurization device and the de-nitration device were put into operation with efficiencies as high as 97%. Various economic and technical indicators are of excellent level.

China to Ban Favorable Power Prices for Energy-Intensive Industries

The National Development and Reform Commission (NDRC) and two other high-level departments have recently banned favorable electricity prices for electrolytic aluminum, ferroalloy, and chlorine and alkali enterprises to calm the industries' quick expansions.

The ban, also issued by the Finance Ministry and the State Regulatory Commission, was issued with a list of 10,234 companies with high power consumption, including factories 'Anshan Steel Company Limited (Anshan City, Liaoning Province) and Aluminum Corporation Of China Limited (NYSE:ACH ) (Chalco) (Beijing).

The price of electricity for the ferroalloys industry, which has been about $0.01 per kilowatt-hour (kWh) since 1999, was abolished October 20, 2007. That for the electrolytic aluminum, and chlorine and alkali enterprises will be stopped within 2008.

In China, power cost accounts for about 30% to 40% in the total cost of electrolytic aluminum enterprises, and the consumption is about 14,500 kWh per ton. The ban will raise the cost by 10%. It is even more unfavorable for the chlorine and alkali industry in which the power cost accounts for about 70%.

Analysts say the electrolytic aluminum industry is still a seller's market, which means energy-intensive enterprises can reduce the impact by raising product prices.

Though the three central departments pledged to punish the companies that failed to implement the rule, local governments are still waiting for information from the central government before they implement the ban.

Factories that have their own power generators will not be affected. This advantage may push energy-intensive enterprises to build their own power plants.

Sinopec net profit up 5.50% to RMB 13.63 bln in Q3

China Petroleum & Chemical Corp (Sinopec)<600028><386>, the country’s largest oil refiner in terms of production capacity, said its net profit has reached RMB 13.63 billion in the third quarter, up 5.50% over the same period last year, announced the company in its quarterly report.

Its combined net profit in the first 3 quarters has reached RMB 49.82 billion, up more than 43.21% compared with the same period last year. Earnings per share was RMB 0.58 in the first 9 months. It has generated an operating profit of RMB 262 billion in the first 3 quarters, while it reported operating loss of RMB 29.16 billion in the same period last year.

Its oil output has exceeded 30 million tons in the first 9 months, up 2.23% year-on-year, and natural gas production rose to 5.98 billion cubic meters, up 11.74% year-on-year. Its realized oil price was RMB 2,956 per ton, down 12.76% year-on-year, while realized natural gas was RMB 810 per thousand cubic meters, up 7.89% year-on-year.

The company spent almost RMB 31 billion in exploitation and development and totally more than RMB12 billion in refineries. Its oil refining capacity surged to115.8 million tons in the first 9 months, up 7.89% year-on-year.

China Mobile may buy stake in South Africa's MTN

China Mobile Ltd (HK 0941) is expected to buy a stake in MTN Corp, South Africa's largest mobile telecom operator, the official Shanghai Securities News reported, citing sources.

The report did not provide details.

In February, China Mobile bought an 88.86 pct stake in Pakistan's Paktel from global telecom investor Millicom International Cellular SA.

China's Cacola Furniture Launches Singapore IPO

Cacola Furniture International Ltd, a furniture maker based in China, said Tuesday it has launched an initial public offering in Singapore of 119 million new and vendor shares priced at 32 cents each.

The IPO comprises 90 million shares and 29 million vendor shares.

Of the shares, 114.5 million will be sold to institutional investors and 4.5 million shares will be sold to retail investors.

The IPO closes on November 5 with trading expected to begin on November 7.

Net proceeds from the IPO of 24.45 million dollars will be used to expand the group's production facilities and distribution network, as well as for working capital.

Cacola posted a net profit of 33.8 million yuan in the first quarter of this year, compared to 23.7 million a year ago.

C. Bank Drains 2 Bln Yuan in Regular Open Market Ops

The People's Bank of China (PBoC) said it drained 2 bln yuan from the banking system via the sale of one-year bank bills in today's open market operations.

The bank said in a statement published on its website that the yield for the paper was 3.6055 pct, compared with the 3.4554 pct level last week and 3.4447 pct the week before.

The PBoC sold 1 bln yuan in equivalent last Tuesday.

Separately, the central bank said it soaked up 4 bln yuan via 28-day repurchase agreements at 3.05 pct, on top of last week's 4 bln yuan sterilization drive also via this instrument at 3.03 pct.

CITIC bank more than doubles net asset value per share in 3rd quarter

CITIC Bank (SZ:601998, HK:0998), the seventh largest commercial bank in China, garnered a net profit of 2.04 billion yuan (273.2 million U.S. dollars) in the third quarter of this year, according to a report released by the bank on Monday.

Net asset value per share at the end of September reached 2.08 yuan, up 103.55 percent on the end of last year. Earnings per share stood at 0.05 yuan in the third quarter, and 0.15 yuan in the first nine months.

CITIC was the country's second bank to be simultaneously listed on the Shanghai and Hong Kong stock exchanges in April, on the heels of the Industrial and Commercial Bank of China (ICBC), the country's largest lender.

Recently, the ICBC reported a 66 percent year-on-year increase in its net profit of 64.1 billion yuan in the first nine months of this year. China Construction Bank, the country's second largest lender, posted a net profit of 57 billion yuan in the first three quarters of this year.

CITIC bank also made an announcement on Monday that it had entered into a Memorandum of Business Cooperation regarding future business cooperation in green economy, a clean development mechanism, China-Japan bilateral trade financing and other business areas with Mizuho Corporate Bank, Ltd. and Mizuho Corporate Bank (China), Ltd.

Mizuho Corporate Bank is a cornerstone investor of the bank, which currently holds 68.26 million H shares of CITIC Bank, representing approximately 0.17 percent of the total share capital.

Transnational think-tank for Pan Beibu Gulf zone to set up soon

China and the Association of Southeast Asian Nations (ASEAN) is expected to form a transnational think-tank soon to mull strategies for economic development in the Pan Beibu Gulf zone, a Chinese official said here Tuesday.

"The Chinese government has had talks with all the ASEAN countries in the Pan Beibu Gulf Rim, inviting them to join this expert panel, which is expected to be set up at the end of this year," said Liu Qibao, Party chief of the Guangxi Zhuang Autonomous Region, when meeting with Prime Minister of Laos Bouasone Bouphavamh.

At the first Forum on Economic Cooperation of Beibu Gulf Rim held in July 2006, Guangxi put forward the proposal on building Pan Beibu Gulf economic cooperation zone, an area surrounded by south China's Guangdong, Hainan provinces and Guangxi, as well as the six ASEAN members of Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Brunei.

"We also proposed the cooperation concept of 'One Axis, Two Wings' last year, which is widely welcomed by related countries," Liu said.

"One Axis" refers to the Nanning-Singapore economic corridor. Of the "Two Wings", one refers to Pan Beibu Gulf economic cooperation and the other refers to Greater Mekong Subregional cooperation.

The Lao prime minister is here to attend the fourth China-ASEAN Expo scheduled for Sunday through Wednesday in Nanning, the region's capital.

Liu said Laos is a close partner within the "One Axis, Two Wings" cooperation pattern, because the economic corridor linking Nanning and Singapore will shore up the development of Laos.

Both Liu and Bouasone Bouphavamh agreed to expand cooperation in agricultural product processing, silk industry and education between Guangxi and Laos.

PetroChina Shanghai IPO attracts record US$440 bil.

PetroChina, the country's largest oil and gas producer, has attracted a record 3.3 trillion yuan (US$440 billion) in orders for its Shanghai initial public offering, state media said Monday. Demand exceeded the previous record set by China's top coal company, Shenhua Energy, which drew 2.67 trillion yuan in a share offer last month, the China Securities Journal reported.

PetroChina, which has set an indicative price range of 15.00 to 16.70 yuan (US$2.00 to 2.22) each for up to four billion yuan-denominated A-shares, is scheduled to announce the IPO price on Tuesday.

China's Chalco Q3 Net Profit 2.04 Bln Yuan

Aluminum Corp of China (Chalco), the nation's biggest aluminum producer, said third-quarter net profit totaled 2.04 billion yuan.

In the first nine months of the year, net profit was 8.44 billion yuan, Chalco said in a statement to the Hong Kong stock exchange late Monday. It did not provide year-ago figures and other details.

This month, Chalco said it formed a venture with Malaysia's MMC Corp and Saudi Binladin Group to invest 3 billion US dollars in an aluminum smelter project in the Middle East.

WiMax is Not Ready for 3G Accreditation Says Datang Chief

WiMax is not ready to be considered part of the 3G family of technologies, the Beijing Morning Post reports, citing China's Datang Telecom. WiMAX was declared to be a 3G technology a couple of weeks ago by the ITU.

"WiMax, based on the IEEE 802.16 standard, is unable to support seamless handover, and can't meet mainstream 3G standards," said Chen Shanzhi, vice chief engineer of Datang Telecom Group, one of China's leading TD-SCDMA vendors.

"In addition, the industrialization of WiMax is immature and many key technologies still need further testing," Chen added.

AIG opens new subsidiary in Shanghai

American International Group Inc today opened a wholly owned non-life insurance subsidiary in the city to pave the way for rapid development.

The Shanghai-based subsidiary - AIG General Insurance Co China Ltd - is based on AIU Insurance Co, the non-life branch of AIG.

AIG gained approval from the China Insurance Regulatory Commission in late July to establish the wholly owned subsidiary.

The former AIU branches in Shanghai, Guangdong and Shenzhen, which formerly reported directly to the company's American headquarters, have been consolidated into AIG General.

The move will help AIG General expand its general insurance capabilities, achieve operational and capital efficiencies, and provide a platform to establish new branches in other areas of China over time.

"The establishment of AIG General China has ushered in a new phase of AIG's development in China," said AIG President and Chief Executive Officer Martin J. Sullivan. "Through the new subsidiary, AIG will continue to play an active role in contributing to the growth of general insurance in China."

AIG, founded in Shanghai in 1919, got a similar license to sell life insurance in China in 1992 as the only overseas player to have a wholly owned subsidiary in the country.

AIG is the biggest overseas non-life insurer in China in terms of premiums. Premiums collected through its AIU branches reach 536.7 million yuan (US$71.7 million) in the first eight months of this year, up nine percent from a year ago.

China pledged to make its insurance market more open to foreign companies when it joined the World Trade Organization in 2001.

Under the commitment, China allows overseas insurers to set up wholly owned subsidiaries in the non-life insurance sector.

China has approved four insurers including UK-based Royal & SunAlliance, America's Liberty Mutual Insurance Co and Japan's Mitsui Sumitomo Insurance to convert branches into subsidiary status.

Overseas players can hold up to half of a life insurance joint venture.

Chinese government accelerates introducing first policy mechanism on coal industry

Chinese government has accelerated introducing a policy mechanism on coal industry to realize the industry's sustainable development.

Informed sources say that the National Development and Reform Commission (NDRC) has submitted coal industry policies for review and approval of the State Council, the country's cabinet.

The government aims to plan and guide the long-term development of coal industry through the first-ever policy mechanism tailor-made for the industry.

It is also a flesh-out version to a policy on the industry by the State Council in June 2005. The to-come policy mechanism will set forth detailed requirements to raise thresholds of coal development and standardize industry order.

The policies will not give special chapters to widely watched coal- related segments as coal-bed methane and coal chemicals.

Earlier media reports quoted NDRC officials as saying that a NDRC plan on coal chemical industry would come forth around this yearend to curb the overheated investments in this area.

Coal makes up 76 percent of the country's primary energy production and 69 percent of the country's energy consumption. For a quite long time to come, coal will remain a major energy source of the country.

In 2006, the country's crude coal output reached 2.325 billion tons, 8.1 percent higher than one year earlier. Industry experts estimate that China's crude coal production will hit 2.5 billion tons in 2007, 6.5 percent higher than that of 2006.

China's coal industry has seen a great variety of problems, such as frequent coalmine accidents and highly scattered production capacities, in recent years as energy tension increases and coal investments heats up.

By end-May, the country had shut 9,000 small collieries, cutting down the country's coalmine number to some 20,000.

China Fire & Security, Anshan Iron & Steel in US$2.9 mln deal

China Fire & Security, a U.S.-listed fire protection products and solutions provider in China, announced that the company has contracted a US$2.9 million deal with Anshan Iron & Steel, the second largest steel and metal producer in China.

The US$2.9 million project is for a power supply system, as part of the first phase of Anshan expansion project. Prior to contracting this project, Anshan entered into a US$7.6 million contract with China Fire in June.

Under the terms of the agreement, China Fire will be providing Anshan Steel with automated fire protection system. China Fire expressed that this project is likely to reap much revenue over the next twelve months.

Based on its accumulated experience and the integration of new fire codes for the iron and steel industry, China Fire related that the company is an ideal candidate for future Anshan Steel expansion endeavors in the coming two years. Leveraging on the company's reputation as an established fire protection company in the market, and more than tens years of experiences with reputable industrial clients, the company is set for further growth in coming years.

Kungfu Catering obtains RMB 300 mln venture investment

KungFu Catering Management Co Ltd, the company that houses the hottest brand in the Chinese fast food chain industry, announced on Thursday, that it will be receiving RMB 300 million worth of venture investment from international equity fund Capital Today Group, and Lian Dong Investment Corp, based in Zhongshan, Guangdong Province.

According to the catering company, the venture capital will fund another 100 stores in the coming year, building on its existing 200 stores, thereby accelerating its expansion pace in the country.

The deal is currently awaiting the approval of relevant authorities. Cai Dabiao, president and director of KungFu, did not disclose the amount contributed by each company in the venture. However, he said that KungFu will remain as the controlling holder.

Regarding hearsays that KungFu is planning to float on the Hong Kong stock exchange, Cai said that the decision will be dependent on the company's development strategy. However, he added that the company has adequate cash flow. As such, a listing will probably not occur until two to three years later, and the target listing bourse is likely to be in China.

At present, China's fast food industry is experiencing a period of rapid development. In 2006, China's catering market grew at a rate of 17%. However, long constrained by the bottlenecks in the management, standardization and production, the Chinese fast food industry ranks only the second corps in the Chinese catering market.

Puma plans a bigger footprint

Taking advantage of the 2008 Beijing Olympics, Puma, which generally keeps a low profile, plans its expansion in the Chinese market with a big increase of new stores and launch of an Olympic collection.

"Beijing Olympics is a very good opportunity and platform for us to showcase our products in China. The Olympics collection will definitely be our focus in the first half of next year," said Joerg Zobel, general manager of Puma Asia-Pacific.

Puma will have many new boutiques next year in both the main as well as second- and third-tier cities. Puma's plan in China is to increase retail spots from 400 to 1,600 next year and a 50 percent growth this year, according to a report of the CEOCIO China magazine.

But Zobel admitted the Chinese market is "very competitive". Almost all sports brands from home and abroad have aggressive Olympics plans. Nike, the No 1 international sports brand and the most high profile in China, supports several Chinese Olympic teams such as swimming.

Adidas, also very high profile, is on an expansion binge as well. Sources said the company plans to double its number of stores to 5,000 in 500 Chinese cities by the end of 2010.

Local brands such as Li Ning have also become a lot more aggressive these past years. Now it has over 4,000 retail spots.

"Puma is not afraid of competition," said Zobel. "China is the fastest growing market in Asia and one of the biggest markets in Asia, if not the biggest. Our growth is very close to that of our major competitors."

Puma's confidence comes from its new owner: PPR Group, France's leading luxury product supplier which owns Gucci and YSL. PPR has acquired 65 percent of Puma, according to a recent public announcement.

"The acquisition doesn't mean we will only target high-end consumers. Our positioning won't change after the acquisition," Zobel said when asked if Puma will turn into a luxury brand.

"A big advantage of this takeover is that Puma can use its expertise and design knowledge of the PPR Group."

Based on the huge design team of the group, Puma is now trying to stand apart from its competitors.

To attract Chinese consumers, Puma plans to support some individual sports stars. Puma has supported national soccer teams of Italy, Sweden and Jamaica in the past.

"If we find the right persons, we will consider partnering with those Chinese sports stars," Zobel said.

Egg prices surge 30% on costly chicken feed

The delivery price for eggs has soared 30 percent to NT$25.2 per catty from NT$19.5 posted in the beginning of October, due mainly to sharp rise in chicken feed prices, according to the Council of Agriculture (COA).

Huang Ying-hao, director of the Animal Industry Department under the COA, said that the international corn price has galloped all the way since the fourth quarter of last year, causing the price of corn feed for chickens to keep soaring.

As a result, the production cost per catty of eggs has surged to a high of NT$21 to NT$23 from NT$15 posted late last year.

On another front, the daily egg supply has decreased by 2,000 to 3,000 boxes (one box contains 200 eggs) due to seasonal factors. The result is that the egg retail price has soared to NT$34 per catty from NT$25 seen two weeks ago. This translates to a hike of NT$1 for one egg, plaguing many consumers and restaurants.

Meanwhile, although the wholesale prices of leafy vegetables fell under the level of NT$50 to NT$45.3 per kilogram yesterday, the prices of rhizoma vegetables are soaring significantly, triggering complaints from consumers.

Huang You-tsai, director of the food and agriculture department, said that the average wholesale vegetable price is expected to drop further to the range of NT$40 to NT$45 per kilogram within one week as a result of the gradual increase in daily supply.

Agricultural Bank of China posts 66% growth in operating profits

The Agricultural Bank of China (ABC), the country's last major state-owned commercial bank still to list on the stock market, has reported a 66 percent increase in operating profit in the first nine months over the same period last year.

From January to September, the bank's operating profit rose to 70.6 billion yuan, exceeding its full-year target, said the bank in a statement.

The sharp profit growth was attributed to soaring revenues from intermediary business, which rose by 60 percent. The growth rate was 14.7 percentage points higher than for the same period of last year.

The statement did not reveal the bank's non-performing loan ratio at the end of September. The bank said in August the ratio dropped by 2.09 percentage points in the first six months from 23.43 percent at the end of 2006.

The high bad loan ratio is a major obstacle to the ABC's ambition to list on the stock market.

The other three banks - the Bank of China, the Industrial and Commercial Bank of China and China Construction Bank, had all completed their reforms and gone public by October last year.

The bank is going through a financial restructuring before an initial public offering. The government is auditing the bank's financial record to guide decisions on how state investment is needed.

Central Huijin, China's state-owned investment company, was planning to inject 40 billion U.S. dollars into the bank to raise its capital adequacy ratio to eight percent, the required ratio for commercial banks in China. (One U.S. dollar equals to 7.4810 yuan)

Hutchison Telecom Falls on Orascom Plan to Cut Stake

Hutchison Telecommunications International Ltd., controlled by billionaire Li Ka-shing, fell by the most in more than four months in Hong Kong trading after Orascom Telecom Holding SAE cut its stake in the carrier.

Hutchison Telecom stock dropped 5.7 percent to HK$10.66 as of 3:45 p.m., the largest decline since June 5. Orascom raised about $198 million selling 143.4 million shares in the Hong Kong company at HK$10.70 apiece, James Griffiths, a spokesman for sale arranger Citigroup Inc. said by e-mail today.

Orascom, controlled by billionaire Naguib Sawiris, bought a 19.3 percent stake in Hutchison Telecom in 2005 for $1.3 billion from Hutchison Whampoa Ltd. The reduction in Orascom's stake comes three months after the Egyptian company received about $793 million in dividends from a Hutchison Telecom unit sale in India.

"Hutchison Telecom stock has gone up, and the market is strong, so it is a good time to sell," said Andrew Jobson, a Hong Kong-based analyst for Daiwa Institute of Research. Jobson has a "hold" rating on Hutchison Telecom stock.

Hutchison Telecom shares had gained 12 percent in the three months before today's trading, compared with a 28 percent advance in the city's benchmark Hang Seng Index.

No. 2 Shareholder

Cairo-based Orascom is the second-largest shareholder in Hutchison Telecom, according to the Hong Kong company's interim report in September. Li controls 51.7 percent of Hutchison Telecom through his personal holdings and the stake held by Hutchison Whampoa in the carrier, according to the report.

Hans Leung, a Hong Kong-based spokesman for Hutchison Whampoa, didn't immediately respond to a message and e-mail seeking comment. Sabrine El Hossamy, a Cairo-based spokeswoman for Orascom, wasn't immediately available for comment after a message was left on her office phone.

Orascom, the largest mobile-phone company in the Middle East and North Africa, said in July it received the dividend payment from Hutchison Telecom from proceeds of the $10.7 billion sale of a 67 percent stake in India's Hutchison Essar Ltd. to Vodafone Group Plc in May.

Hutchison Telecom sells wireless services in eight markets in Asia, Middle East and Africa. Hutchison Whampoa, Li's largest company, has assets spanning telecommunications, ports, and energy.

Wind Talks

Wind Telecomunicazioni SpA, an Italian mobile operator controlled by Sawaris, is in talks to form a venture with 3 Italia SpA in which the two carriers will place their telephone towers, Wind Chief Executive Officer Luigi Gubitosi said on Sept. 27. A stake sale in the venture may follow, Gubitosi said.

The sale of a 50.1 percent stake in the venture comprising Wind and 3 Italia's towers that house antennas used to emit wireless phone signals may raise more than 2 billion euros ($2.9 billion), the Ansa newswire reported on Oct. 16, without citing anyone. 3 Italia is controlled by Hutchison Whampoa.

China may increase gold imports

With surging investment demands in China, gold imports to the country are likely to increase in the coming year, according to Zhang Weixiang, an insider in the Chinese gold industry, during an investment forum held in Beijing last week.

According to Zhang, general civil gold reserves are estimated at 4,000 tons, while reserves accumulated by People's Bank of China totaled at approximately 600 tons. Despite an increment in average gold consumption in China, that has risen from 0.16 grams in 2002 to 0.35 grams, it is still below the international standards.

Prices of gold have increased by approximately 30% over the last year. Valued at a price of US$300 in 2002, prices of gold have soared to a two decades record high at US$771.10 an ounce.

A weakening U.S. currency and geopolitical reasons have triggered a surge in gold prices globally. Zhang added that in the past five years, gold consumption has increased by more than 50% in China whereby an Increasing number of Chinese are turning towards gold as a viable form of investment.

SMIC's deal no flash in the pan

THE Semiconductor Manufacturing International Corp (SMIC) has won orders from Spansion Inc to make and sell flash memory components in mobile phones.

SMIC, the biggest made-to-order chip maker in the Chinese mainland, announced this yesterday in a statement.

Nasdaq-listed Spansion, previously a joint venture between AMD and Fujitsu, will transfer 65-nanometer technology to SMIC on 12-inch wafers, according to the statement. This technology will allow the Shanghai-based SMIC to produce smaller chips with more features at lower costs.

Neither company provided costings for the deal.

Spansion, which has a factory in Suzhou, Jiangsu Province, currently produces about 200 million chips a year in China, of which 150 million are exported.

The remaining 50 million are sold to handset makers in China, including Nokia Oyj and Motorola Inc.

"SMIC has made great strides in anticipating the growing flash memory market. With China's consumer electronics market comes the opportunity to create and nurture the growth of various flash memory services and markets," said Richard Chang, SMIC's president and chief executive.

The booming domestic handset market in China will fuel the demand for memory chips for stored programs, pictures, video and music in phones, industry insiders said.

Koelnmesse seeks tieups

GERMANY'S Koelnmesse GmbH is in talks with a number of Chinese exhibition organizers to take over their events or set up joint ventures to tap China's rapidly growing exhibition industry that is becoming more international, a senior executive said yesterday in Shanghai.

Tieups with local exhibitors, which should help Koelnmesse increase its existing portfolio in China, are preferred, according to Michael Dreyer, Koelnmesse's vice president.

"We don't want to dilute the market as it's not in the interests of our customers," said Dreyer, who is in charge of the Asia Pacific region. "What we want is a win-win situation."

Dreyer made the remarks on the sidelines of the China International Hardware Show, the largest of its kind in the country. Koelnmesse shares revenue and branding together with the country's state-level industry association at the event.

Dreyer said they are ongoing talks with some Chinese exhibitors but they are at a preliminary stage. He refused to name any of the potential partners. The exhibitors are leading Chinese firms or those that are strong in a certain area.

Koelnmesse, one of Germany's largest exhibition organizers which holds events like Art Cologne, has just signed an agreement with the government of Shunde, a city in southern Guangdong Province, to help organize a household appliance fair from next year.

The German exhibitor plans to hold more exhibitions in furniture production, food hospitality and expand its consumer electronic fair in China, its fourth largest market by revenue at 15 million euros (US$21 million).

Buffett 'cautious' in Chinese markets

BILLIONAIRE Warren Buffett yesterday said investors should be "cautious" about China's stocks after the country's benchmark index more than doubled this year.

"We never buy stocks when we see prices soaring," Buffett said in Dalian, northeast China, where he's visiting a subsidiary of his Berkshire Hathaway Inc.

"We buy stocks because we're confident of the company's growth. People should be cautious when they see prices rising."

Buffett has sold shares of PetroChina Co, which has risen 76 percent this year to become the world's second-biggest company by market value. China's benchmark CSI 300 stock index has climbed 48 percent since May 17, when Li Ka-shing, Asia's richest man, said there "must be a bubble."

"Buffett is right about China stocks, whose valuations are too high," Wang Zheng, who manages the equivalent of US$500 million at the asset management unit of Everbright Securities Co in Shanghai, told Bloomberg News. "It doesn't make sense any more to still play in such a market. It's about time to pull out of it."

Buffett said he was "appreciative" of PetroChina's performance and that he is doubtful that he can find another stock like it.

Berkshire owned more than 10 percent of PetroChina's publicly held shares at the end of last year. The company has sold all of its holding, Buffett said earlier.

He also denied Chinese media reports yesterday that Berkshire had invested in China Life Insurance Co.

Imports of copper set to fall

CHINA'S refined copper imports, the world's biggest, may fall almost eight percent in 2008 as domestic output increases, Maike Investment Holding (Group) Co said yesterday.

The country will probably import 1.35 million metric tons of the metal next year, from an estimated 1.46 million tons this year and 827,000 tons in 2006, Shen Haihua, general manager of Shanghai Maike Dickson Investment Management Co, a unit of the metals trader Maike Group, said yesterday.

China, the world's fastest-growing major economy, is the biggest user of copper, used in wires and pipes. Gross domestic product expanded 11.9 percent in the second quarter, and analysts surveyed by Bloomberg News estimate growth at 11.5 percent in the three months to September 30.

Domestic production of refined copper may be 3.8 million tons next year, from an estimated 3.4 million tons this year, Shen said, confirming data in a report by Macquarie Bank Ltd.

Apparent demand for the metal will rise 3.2 percent in 2008 to 4.9 million tons, after climbing by an estimated 32.5 percent this year, Shen said.

Plane fact: Boeing on fast track to profits

BOEING Co, the world's second-biggest commercial-airplane maker, said yesterday earnings rose 61 percent in the third quarter as it ratcheted up production to deliver nine more jetliners than a year earlier.

The company boosted its full-year sales and profit forecasts, Bloomberg News reported. Net income increased to US$1.11 billion, or US$1.44 a share, from US$694 million, or 89 US cents, a year earlier, when Boeing spent money to close its in-flight Internet service.

Sales grew 12 percent to US$16.5 billion, the Chicago-based company said yesterday in a statement sent by PR Newswire.

Boeing boosted commercial-aircraft deliveries nine percent to 109 in the quarter, putting it closer to eclipsing Airbus SAS as the biggest plane maker.

Boeing has forecast deliveries to rise to as many as 520 planes next year, even with delays that have pushed back the first shipment of its 787 Dreamliner by six months. Orders are being fueled by low-cost carriers and airlines in Asia and the Middle East.

"Commercial aviation demand for Boeing jets is still strong globally despite fears of weakness in the US," said Matthew Spahn, an analyst at TCW Group in New York, which owns about 1.3 million Boeing shares. "Even in the US, fares have been rising and passenger-load factors remain strong. That bodes well for continued strength."

Boeing was projected to post net income of US$1.26 a share, the average estimate of 11 analysts surveyed by Bloomberg. Revenue was estimated to be US$16 billion.

Boeing rose two US cents to US$93.95 on Tuesday in New York Stock Exchange composite trading. The shares have increased 6.9 percent this year, compared with a 7.1-percent gain in the Standard & Poor's 500 Index.

CEO James McNerney, 58, is ramping up assembly lines 12 percent this year as he works through a record backlog of more than US$200 billion in orders.

Boeing has forecast commercial shipments this year will total 440 to 445 planes, up from 398 last year. Through the end of the third quarter, Boeing deliveries were up 12 percent to 329 planes from 295, led by 81 of its 737 models.

Assembly time for 737s, the world's most widely flown airplane, has been cut in half to 11 days since 1997 helped by converting production to a moving assembly line.

China may skip phone generation

CHINESE telecommunications companies may limit investment in third-generation services for mobile phones to prepare for the adoption of even faster wireless technologies, ABN Amro Holdings NV said.

"There isn't a huge business case for 3G," Wendy Liu, ABN Amro's head of China research, told reporters in Hong Kong yesterday, Bloomberg News reported. "It makes sense for China to go directly to 4G as it may offer better returns on investments," she said.

Chinese carriers may spend about US$20 billion building networks for 3G services, which allow faster downloads of video and music on mobile phones, CLSA Ltd Asian telecommunications research head Francis Cheung said in May. Fourth-generation services offer download speeds up to 14 times quicker than 3G.

Investments for 4G are not expected to start until 2010, ABN Amro's Liu said. The technology may allow users to transfer data at 200 megabits per second, according to the Website of Alcatel-Lucent SA, the world's largest maker of telecommunications equipment.

Tsingtao Beer to open 1st Thai plant

CHINA'S Tsingtao Brewery will open its first brewery in Thailand.

The board of the nation's second biggest beer maker has agreed to invest 40 million yuan (US$5.3 million) to set up its first overseas plant in Thailand, the company said in its statement filed with the Shanghai Stock Exchange market today.

The initial investment will allow Tsingtao to take a 40 percent stake in the venture, which is expected to produce 80,000 kiloliters of beer a year. The first phase of the project, which will cost 294 million yuan, will be able to produce 40,000 kiloliters annually.

Tsingtao didn't provide a time table for construction or the name of its foreign counterpart in the statement.

Despite increasing demand from the domestic market, Tsingtao plans to expand overseas sales to catch up with China Resources Snow Breweries Co, the biggest beer maker in China. Tsingtao is 27 percent-owned by Anheuser-Busch Cos, the world's second-largest brewer.

Qingdao-based Tsingtao currently sells its beer in more than 50 countries and regions worldwide, accounting for 50 percent of China's total beer exports.

The company's third-quarter financial report, which was released today, shows it posted a 52 percent jump in profit year-on-year to 328.6 million yuan with sales rising 15 percent to 4.2 billion yuan.

Sales in overseas markets grew 9.2 percent, lower than its 11.1 percent growth for the total sales in the third quarter.

Industry analyst said the plant will further benefit Tsingtao by eliminating import tariffs and boosting its price competitiveness in Thailand.

Thailand could also be a stepping stone for Tsingtao to tap other southeast countries in the Asean Free Trade Area ahead of its ambitions plans to target the European and American markets.

Beer consumption in Thailand has grown more than 12 percent annually since 2002 and reached 2.1 million kiloliters last year, Tsingtao said in an e-mail statement today.

Tsingtao Brewery also said today it plans to invest 267 million yuan to boost its barley production by 100,000 metric tons a year in its home city of Qingdao.

Nokia Siemens Networks Wins Guangdong Telecom Deal

Guangdong Telecom has selected Nokia Siemens Networks charge@once solution for its upcoming convergent charging needs.

The deal will enable Guangdong Telecom to pave way for the flexible charging of mobile services it intends to launch in the future. With the deal the operator also takes a step forward in fixed-mobile convergence. The charge@once convergent online charging solution for voice and data will enable Guangdong Telecom to provide prepaid and postpaid online charging for its future mobile, Personal Handyphone System (PHS) and data subscribers. The solution will also allow the operator greater flexibility in tariff policy and marketing strategies, and shorten time-to-market for new services.

Nokia Siemens Networks will integrate the solution into Guangdong Telecom's network and support every stage of the solution lifecycle while improving operational efficiency. The system is expected to be ready for a pre-commercial pilot in November this year. Nokia Siemens Networks has a vast knowledge base and a successful track record of integration capability and successfully delivers hundreds of systems integration projects worldwide every year.

Shanda Focuses On In-game Advertising Business

Chinese online gaming firm Shanda (SNDA) says Donald Chan has joined the company as senior vice president and will oversee Shanda's new in-game advertising business.

Chan served most recently as the national managing director of China for Leo Burnett Shanghai Advertising Company.

"We are pleased to welcome Donald Chan as the newest Senior Vice President at Shanda," said Tianqiao Chen, Shanda's chairman and CEO. "Donald is one of the most influential persons in China's advertising industry. With his extensive experience in marketing, advertising and brand building in both traditional and digital media, we believe he is the ideal candidate to head our new IGA business and view him as a strategic addition to our management team."

PetroChina may raise record $8.9 bln from Shanghai listing

PetroChina, the nation's largest oil producer, has set the price range of its A-share Initial Public Offering (IPO) at 15 to 16.7 yuan per share, the company announced on Wednesday.

If its IPO price is fixed at 16.7 yuan per share, the oil giant would be able to raise a record-breaking 66.8 billion yuan (about 8.9 billion U.S. dollars) from its imminent Shanghai listing, surpassing the 66.58 billion yuan achieved by China Shenhua Energy Company, the country's largest coal producer, earlier this month.

The company has been handed the green light from the country's securities watchdog to issue up to four billion A shares on the Shanghai Stock Exchange.

Experts predicted PetroChina would finally issue the shares at the high end of the price range, a practice followed by recently returning red-chips such as China COSCO Holdings, China Construction Bank and Shenhua.

The price range was decided after the company staged a three-day consultation from Oct. 22 to 24.

According to the company's prospectus, it will use 6.84 billion yuan and 5.93 billion yuan respectively to boost production capacity at its Changqing and Daqing oil fields. A total of 1.5 billion yuan will be used to build production facilities at Jidongfield, the country's largest.

It also plans to invest 17.5 billion yuan to upgrade its Dushanzi oil refinery and ethylene facilities and six billion yuanin expanding an ethylene plant in Daqing, in northeast China.

PetroChina is the first of the country's three petrochemical giants including Sinopec and the China National Offshore Oil Corp.(CNOOC) to get listed on overseas stock market.

PetroChina began trading in Hong Kong and its American Depository Receipts were listed on the New York Stock Exchange in 2000.

Citic Securities Co., UBS Securities Co. and China International Capital Corp. are the main underwriters of the issue. (One U.S. dollar equals to 7.4938 yuan)

Listed companies' combined net profits up 80%

The total net profits of 387 firms listed on China's Shanghai and Shenzhen bourses surged to 61 billion yuan (US$8.14 billion) in the first nine months, 80 percent up from the same period last year.

The figure only grew by 30 percent last year. The turnover of the 387 companies in past three quarters also rose 24 percent to 697.1 billion yuan (US$93.1 billion), according to their third quarterly reports.

The average earnings per share reached 0.26 yuan, up 0.09 yuan from the same period last year.

Of the 387 companies, the top 30 in terms of net profits contributed 38.4 billion yuan (US$5.13 billion), or 62 percent of the total. Five belong to the finance and insurance industry, including China Merchants Bank and China Mingsheng Banking Corp., ten to the refining and processing industry of metal and non-metal materials, and five to the mining industry.

Because of the sizzling stock market, securities dealers have generally reported major growth. Haitong Securities Company Limited has reported 4.1 billion yuan (US$547.4 million) worth of net profit in the first nine months, and Northeast Securities Co Ltd made more than one billion yuan (US$133.5 million).

A total of 121 companies said they would report annual profits similar to or lower than last year, 100 have estimated year-on-year gains in net profits, while 20 said they would report losses. The others made no estimates in their reports.

Canada's RIM brings BlackBerry to China

RESEARCH In Motion Ltd. (RIM) has shipped the first of its BlackBerry smartphones to China and aims to start selling them later this year, a major breakthrough for the Canadian company in penetrating the huge Asian market.

RIM said Tuesday it struck a Chinese distribution deal with Alcatel-Lucent. The first handset to be sold under the new partnership is the 8700 model, versions of which RIM has sold globally for several years.

"China and India are emerging mobile phone behemoths that could contribute millions of subscribers to RIM over the next several years," said Canaccord Adams analyst Peter Misek.

Research Capital analyst Nick Agostino said the BlackBerry was considered a premium service that would take time to gain traction among the big-business customers that RIM would target in China.

Even so, he added, the market there was so vast that even if RIM was able to capture just 1 percent of it, "it is certainly a lucrative opportunity for share holders."

The company has long recognized China's importance in its global plans and first officially announced plans to sell the BlackBerry here in May 2006.

"We look forward to building on the early interest and momentum we are experiencing in China with both multinational and domestic corporations," Jim Balsillie, RIM's co-chief executive, said in a statement.

Agostino said RIM had talked about wanting to enter China for three to four years.

The Waterloo, Ontario-based company already has a service partnership with China Mobile for its entry into China, where it will face competition from low-cost rivals, including a popular local service called RedBerry.

Concern by Chinese authorities over communication network security could partly explain why RIM took as much time as it did to introduce the BlackBerry in the country, some market watchers said.

RIM's BlackBerry is already available from more than 300 carriers around the world.

Earlier this month, RIM said it had moved past the 10 million subscriber milestone and had shipped its 20 millionth handset.

It also said efforts to diversify its user base beyond the corporate sector were taking hold. For the first time, more than half of its new North American subscribers came from the "non-enterprise" market segment in the second quarter.

NTPC mines Indonesian JV to secure coal linkage

PSU major NTPC may enter into a power and coal joint venture (JV) with an Indonesian company as part of its initiative to expand global operations and secure coal linkage for its power plants. The company is in talks with Indonesian mineral company PT Tambang Batubara Bukit Asam Tbk (PTBA) for entering into a JV where NTPC would help the company in its proposed power foray and also jointly mine coal for use by the PSU.

"A delegation from NTPC is expected to visit Indonesia soon to hold final discussions with PTBA for a possible joint venture. If the talks succeed, the two sides could sign a MoU for development of a thermal power plant and a coal mine," a source in the ministry of power said.

Senior NTPC officials have already met PTBA representatives in Indonesia in September this year. NTPC chairman and managing director T Sankaralingam has now written to president director of PTBA Sukrisno expressing his desire to sign an agreement on mutually beneficial business model.

Sources said that NTPC is interested in setting up two JV operations with PTBA - one for providing engineering support for developing a power plant and another for developing a coal mine that would allow the PSU to bring a portion of the production for use in its power plants. PTBA has recently won tender for constructing a power plant and has indicated that it would grow this business.

It is expected that the coal deal with PTBA would mainly be used by NTPC to feed its proposed 500 mw power plant in Sri Lanka based on imported coal. A portion of the coal may also be brought back to India.

NTPC has been scouting for coal blocks in Indonesia, Australia and South Africa to meet its domestic demand. The demand for coal is expected to shoot up sharply as NTPC intends to become a 50,000 mw company (from the current 27,904 mw) by 2012.

Last year (2006-07), NTPC used 2.43 million tonne (mt) of imported coal out of its total requirement of 111.02 mt. The power PSU is focusing on Indonesia due to its proximity to the country as well as huge reserves of good quality thermal coal.

PTBA is the sole state-owned coal mining company in Indonesia and owns two of the largest coal mining sites Tanjung Enim and Ombilin. It produces over 10 mt of coal annually, 25% of which is exported to countries such as Malaysia, Taiwan and Japan.

Singapore's CapitaLand buys site for RMB1 billion

Southeast Asia's biggest property developer CapitaLand has bought a commercial site in Zhenjiang in a government land tender for RMB1.043 billion.

The 40,355-square-meter site is in Hangzhou city in Zhejiang Province. CapitaLand said it plans to build its fourth Raffles City development in China on this site. Our illustration is of the existing Raffles City in Shanghai.

The development will have an office tower, a retail mall, a five-star hotel and apartments. It will be called Raffles City Hangzhou and is expected to be completed by 2011.

Liew Mun Leong, president and chief executive officer of CapitaLand said, 'Given the site's excellent location, we are confident Raffles City Hangzhou will become a new landmark in the city, attracting consumers, tourists and business travelers from all over China and beyond.

'With growing interest from many countries to have CapitaLand develop a Raffles City in their respective cities, we aim to have a total of ten Raffles City developments within the next five years.'

Chinese oil giant plans $12b float

PetroChina, China's largest oil and gas producer, is to make what may be the country's largest share float, raising more than US$9 billion ($12.10 billion).

PetroChina did not say when it would list in Shanghai, but listings generally occur within about 10 days of the completion of floats. .

The current record for a float in China's stock market is held by coal producer Shenhua Energy, which raised 66.58 billion yuan ($11.90 billion) in its Shanghai offer last month.

PetroChina has said it needs 37.8 billion yuan for five projects to construct oil fields, upgrade technology and expand ethylene capacity. Surplus proceeds will supplement the company's working capital.

Construction on $3 Billion Coal-Chemical Project Begins in China

Construction for China Oceanwide Holdings Group's (COHG) (Beijing) coal-chemical project has begun in Moteyou Qi in the Inner Mongolia Autonomous Region. The $3 billion project covers an area of 680 hectares. After Phase I construction is complete, COHG will have the capability to produce 180 tons of methanol every year with an expected sales volume of more than $1 billion. The project will use clean coal technology, compliant with China's sustainable-development strategy and energy industrial policy.

China's quick economic development in the past 20 years has prompted a need for more resources to meet energy demand. Until 1993, China was a net exporter of oil; but in 2006 the crude oil that China imported amounted to 145.2 million tons, 47% of the country's consumption. As China's oil imports increased, the international oil price surged. In 2006, China's oil imports increased by 14.5% compared with the previous year, and the importing value jumped 39.2%.

To address the energy strain on its economy, China is devoted to looking for substitutive resources for oil. The country is turning to its abundant coal reserves. Statistics show that China has coal reserves of 114.5 billon tons, 12.6% of world's total, with Inner Mongolia boasting expected reserves of 12 billion tons. Before 2020, China will spend more than $130 billion on the development of its coal-chemical industry, producing methanol, dimethyl ether (DME), alkene, etc.

In the past, there were two concerns for which China hesitated to invest in the industry: the negative impact it could have on the environment and the economic feasibility. With clean coal technology, products such as methanol and DME have proven to be more efficient and environment-friendly than traditional fuels. Under the circumstances of high oil price, the coal-chemical industry could become profitable and keep China from relying too much on foreign oil.

Firms agree to buy Inner Mongolia mine stakes

The Global Emerging Market Group and Tomorrow International Holdings (0760), which manufactures electronic products and printed circuit boards, said they have entered into a memorandum of understanding to acquire stakes in a coking coal mine in Inner Mongolia.

They aim to spend US$60 million (HK$468 million) to build the underground mine and a coking coal plant.

Due diligence is expected to be completed by the middle of next month, the companies said yesterday, and a formal deal is to be signed by December.

TIHL will own and operate the coal mine with Inner Mongolia Mengxi High-Tech Group. The mine is estimated to have a reserve of 99.6 million tons and capable of producing 1.2 million tons of raw coal annually.

Under the agreement, a subsidiary of GEM will have 49 percent ownership in the reserve through the joint venture with Mengxi and rights to receive 70 percent of the distributions and profit from the operation.

Earlier, TIHL acquired an interest in a coal mine in Inner Mongolia from GEM, which would subscribe to 600 million new shares of TIHL at 37 HK cents each and has an option to acquire 310 million shares at 80 HK cents.

Construction of the coking coal project is expected to be completed in 18 months. Trial production is set to start early next year and 500,000 tons would be produced and sold initially.

"We will sell our coke to China Shenhua Energy Company (1088)," said Jonathan Yeap, chairman and chief executive of GEM subsidiary Joy Harvest Investment.

He added that 50 percent to 70 percent of construction costs would be financed by local banks and the remainder by GEM. "We are focusing on expanding our coking coal business and this is the first project," Yeap said.

GEM is also negotiating the acquisition of four operating coking mine assets in Shanxi, northern China, and Inner Mongolia, Yeap said.

Shares in TIHL closed yesterday at HK$1.20, down 13 percent.

Renewable energy accounts for 8% of total consumed energy last year

By the end of 2006, China's renewable energy utilization amounted to 200 million tons of standard coal (excluding the traditional use of bioenergy), accounting for 8% of total energy consumption in China – 0.5 percentage points higher than that of 2005. This was revealed at the 2007 World Solar-energy Conference held in Beijing.

Director of China's Renewable Energy Academy, Shi Dinghuan, who is also a consult for the State Council, made a speech on China's renewable energy development at the conference.

He pointed out that the Chinese government has paid great attention to the development and utilization of renewable energy by issuing the Renewable Energy Law; and making a medium and long term development plan on renewable energy.

Small-scale hydro-power plants, wind power, biomass energy, solar energy and geothermal energy are all developing rapidly; while research and application in the field have also developed considerably over the past ten years. In particular, small-scale hydro-power, solar energy, and methane utilization are all leading technologies in the world; they have laid a solid foundation for large scale utilization of renewable energy. The solar energy heater is the earliest industrial project in China. By the end of 2006, China's solar energy heaters grew to a scale of 90 million square meters, accounting for 75.8% of the world's total holding.

According to China's medium and long term development plan on renewable energy, by 2020 China's renewable energy will account for 16% of total energy consumption.

Northwestern China's Largest Biodiesel Production Base Built in Shaanxi

A biodiesel production base was recently completed and put into production in Tongchuan City in northwestern China's Shaanxi Province. The production base will produce 800,000 tons of biodiesel in 2007. In 2008, annual production will reach full capacity of 100,000 tons.

This biodiesel production base is invested by Xi'an Baorun Industrial Development Company Limited. Baorun's business is in the wholesale of gasoline, kerosene and diesel. The company has refined-oil storage facilities in Xi'an, Baoji, Ningxia and Tongchuan. It also has its own railway tracks for loading and transportation. In recent years, Baorun has begun to engage in the research, development and manufacturing of bio-energy. The Northwest Sci-Tech University of Agriculture and Forestry provided the core technology using pericarpium zanthoxyli oil as the project's major material.

Biodiesel is a clean and renewable energy. The fruit of pericarpium zanthoxyli, rhizoma coptidis, shinyleaf yellowhorn, physic nut and other oil plants can be made into environmentally friendly liquid fuel. About 0.46 million acres of pericarpium zanthoxyli have been planted in central Shaanxi where the base is located. Development plans call for adding a 1.2 million-acre pericarpium zanthoxyli field soon. The local forestry department estimates that the pericarpium zanthoxyli generate more than $53 million of income to local pericarpium zanthoxyli farmers.

It is also reported that the production base has signed long-term purchase agreements with the forestry bureaus of Yongshou, Liuba, Ningqiang and Danfeng counties to secure the project's raw material supply.

Melco consortium ties in with Wafer

Melco International Development Ltd (Melco)<200>, a leisure and gambling conglomerate in Macau, made an announcement on Monday that a consortium set up by a subsidiary, plans to inject its Asian lottery-related business into Wafer Systems<8198>, a leader in network solution and service provider in Hong Kong and China Mainland.

The consortium comprises of Melco's wholly owned subsidiary Melco Lottventures Holdings, Taiwan-listed Firich Enterprise Co., Ltd (FEC)<8076> and Singapore-listed LottVision Ltd.

According to Lawrence Ho Yau-lung, chairman and chief executive of Melco, the company trusts that Wafer will emerge as one of the leading lottery-related service providers in China, considering the combined strengths of the above consortium.

A company named Power Way Group will be set up for a special purpose, in which, Melco, Firich and LottVision will be holding 54.8%, 26.9% and 18.3% stakes respectively. Following the deal, Wafer will indirectly hold 60% of Wu Sheng, a subsidiary of Firich, which is mainly engaged in the manufacturing and sales of lottery vending terminals in China. In addition, Wafer will be owning 80% of PAL Development, a subsidiary of Melco, an operator in lottery-related businesses and ventures in Asia.

It is estimated that HK$ 72 million worth of new Wafer shares will be issued, with HK$606.8 million of bonds convertible into HK$ 713.9 million new Wafer shares.

Taiwan government reportedly exerts pressure on Intel to fulfill WiMAX MOU

Taiwan's Ministry of Economic Affairs (MOEA) reportedly is pressing Intel to fulfill its commitment to make equity investment in Taiwan's WiMAX operators as a means to foster the development of the WiMAX industry in Taiwan, according to sources in Taiwan's MiMAX industry. However, Jong-chin Shen, deputy director general of the Industrial Development Bureau of the MOEA denied such news, stating that the MOEA would not take any retaliative measures against international players.

According to the sources, on October 17, 2005, Ho Mei-yueh, Taiwan's economic minister at the time, and Intel executive vice president Sean Maloney signed a MOU (memorandum of understanding) for cooperation to develop WiMAX technology in Taiwan, with Intel promising to make equity investment in licensed Taiwan-based WiMAX operators.

Taiwan's National Communications Commission (NCC) in July of 2007 awarded six companies with regional WiMAX operating licenses in order to kick off WiMAX services in Taiwan.

However, Intel so far has not yet committed equity investment in any of the six licensed operators and instead, reportedly has set up a joint venture with Japan-based KDDI, with Intel taking up a 17.65% stake in the joint venture, Wireless Broadband Planning KK (WBPK), with a goal of applying for a WiMAX license in Japan, according to wire service reports.

Due to increasing pressure from Taiwan-based WiMAX companies, Intel reportedly has promised to soon commit capital investments in one or two licensed WiMAX operators, according to market sources.

Tecom to begin shipping WiMAX macro base stations by end of 2007

Taiwan-based telecom equipment maker Tecom is expected to begin volume shipments of WiMAX macro base stations by the end of this year, with the initial shipments to be used in the on-going M-Taiwan (Mobilize Taiwan) Program, according to company sources.

Acccording to Tecom's roadmap, the company will cooperate initially with Taiwan-based WiMAX Telecom, one of six licensed WiMAX operators in Taiwan, in the production of WiMAX base stations and then to expand the cooperation with telecom clients in Asia Pacific, the sources indicated.

Shipments of WiMAX macro base stations are expected to total 15-30 units in 2007, with the company aiming to ship more than 1,000 units in 2008, the sources stated.

The sources also claimed that the company already started volume shipments of WiMAX CPE (customer premise equipment) products in September of this year, with shipments to reach 5,000-10,000 units by year-end 2007.

For 2008, the company expects its shipments of WiMAX CPE devices to hit 100,000-200,000 units, the sources indicated.

Total WiMAX revenues are expected to reach NT$2 billion (US$61 million) in 2008, accounting for 20% of Tecom's projected revenues, the sources noted.

Beijing fuel oil prices may rise 3% next year

Fuel oil prices in Beijing may rise 3%, from the current RMB 5, 000 per ton to RMB 5,190 in January next year, forecasted Wang Yongjian, president of Sinopec Beijing Yanshan Corp, a subsidiary of the nation's largest oil refiner, China Petroleum and Chemical Corp (Sinopec).

The price increase will take effect as Beijing introduces the Euro IV emission standard to cut pollutant emission before 2008 Olympic Games. It will help the company to counter rising crude oil costs in oil processing, as crude oil futures hit a record high of RMB 669 per barrel recently.

China controls prices of diesel and gasoline to minimize their impact on inflation, which rose to 6.5% in August, the highest in more than 10 years. If crude oil prices remain at RMB 600 a barrel, the company will lose over RMB 1 billion this year. Oil prices need to fall below RMB 450 for the company to make a profit from processing, as half of its oil demand is met by import.

The company is capable to process 10 million tons of crude oil annually and supplies 60% of Beijing's demand for oil products. PetroChina and other retailer suppliers occupy the rest of the market. After upgrade in June, the company is able to produce Euro IV-standard fuels.

Fuel demand in Beijing may increase 5%-6% annually in the coming years. The firm plans to source crude oil from PetroChina's Jidong Nanpu field, China's largest discovery in almost 50 years. Wang also added, the company's parent company Sinopec, has started building a pipeline to pump crude oil from the Caofeidian port near the field to Yanshan.

Wal-Mart recallstoy animals for lead

WAL-MART Stores Inc. is recalling toy animals made in China because of excessive lead levels discovered since it stepped up safety testing in August, the retailer said Friday.

In a news release, the United States' largest retailer and largest toy seller described the recalled items as sets of realistic-looking farm animals, jungle animals and dinosaurs.

The toys are sold in loose sets in cellophane-type bags without a brand name. Wal-Mart said independent testing revealed excessive levels of lead in the material the toys were made of.

Wal-Mart spokeswoman Linda Blakley declined to name the manufacturer and did not know how many sets were sold or exactly how long they've been stocked. "We've had these for a while," she said.

Blakley said Wal-Mart directed its stores to pull the toys off shelves and hold them at the start of last week after it received preliminary test results.

It decided to issue the voluntary recall Friday after verifying the testing and notifying the U.S. Consumer Product Safety Commission (CPSC) and the manufacturer, she said.

Wal-Mart believes the manufacturer has also sold the toys through other retailers. Blakley said Wal-Mart had provided the maker's name and the test data to the CPSC and it would be up to the CPSC to work with the manufacturer to contact other retailers.

The retailer said it was posting photos and details of the affected toys on its Web site.

According to the photos, the animal sets were sold in cellophane-type bags with a blue cardboard hanger reading "Dinosaurs," "Farm Animals" or "Jungle Animals" and bearing a large printed price of 88 cents.

Wal-Mart said it had directed stores to remove the sets from shelves and placed a register block on the items so that any remaining in stores cannot be sold.

Wal-Mart said in August it was stepping up testing and safety reviews of the toys it sells to reassure consumers ahead of the critical holiday season after a series of recalls of Chinese-made toys over hazards to children.

It asked manufacturers to resubmit testing documentation for toys already on the shelves or in shipment, so that Wal-Mart could double-check the results. It also said it would increase the number of toys tested at independent labs by about 25 to 50 percent, or an average of 200 additional items daily.

Wal-Mart China, which is based in Shenzhen, could not be reached for comment yesterday.

The toy industry has been shaken by several high-profile recalls of Chinese-made products, from Hasbro Inc.'s faulty Easy Bake Ovens to the worldwide recall of 1.5 million preschool toys from Fisher-Price of Mattel.

China owns 4 of 10 global top firms by market value

Ranked-based on market value, a total of four Chinese enterprises were listed on the global top ten list, attributed by its A-shares and H-Shares which have been rising overwhelmingly.

With reference to the closing price on Oct. 16, China and U.S. companies took up four positions each in the list. The Chinese companies included world's second PetroChina<857>, the fourth China Mobile<941>, the fifth China's Industrial and Commercial bank (ICBC)<601398><1398>, and the eighth China Petroleum & Chemical Corp (Sinopec)<600028><386>.

The overall market value of these four firms reached a high of US$1.4039 trillion against a market value of US$1.4833 from the U.S., with a US$80 billion difference only.

Among the global banks, China's ICBC emerged as the world's No.1 in terms of market value, approximated at US$335.7 billion.

According to the list, PetroChina has surpassed General Electric Co and is positioned as the world's second, preceding Exxon Mobile Corp.

On the average, P/E ratio of the four Chinese firms increased by 31.44%, significantly exceeding the top ten firms' total of 21.45%. It is reported that P/E ratio for PetroChina, China Mobile, ICBC and Sinopec, stood at 22.56%, 41.85%, 45.28% and 16.06% respectively.

CVC buys 29% stake of Zhuhai Zhongfu

CVC Asia Pacific, a joint venture of private equity firm CVC and Citigroup, has become the largest shareholder of Zhuhai Zhongfu Enterprise Co British private equity firm CVC Capital Partners Ltd. has invested $225 million in a Chinese plastic-bottle manufacturer, the Wall Street Journal reported on Sunday.

The investment gives CVC, of London, a 29 percent stake in Zhuhai Zhongfu Enterprise Co , which supplies plastic bottles to Coca-Cola Co and PepsiCo Inc , both companies told the Wall Street Journal.

CVC, which said it has received all the necessary government approvals for the investment, and will become the biggest shareholder in the Shenzhen-listed company.

The deal has already closed.

China fixed assets investment rises by 25.7%

Despite regulations to curb spending in China, fixed asset investments in the first three quarters of the year grew by 25.7% year-on-year, as announced in a statement released by the central bank on Sunday.

However, the figure represents a 0.2 percentage point drop from the growth experienced in the first half of the year. According to Wu Xiaoling, vice governor of the People's Bank of China, retail sales increased by 15.9% year-on-year, representing a 0.3 percentage point decline from the growth in the previous year.

In a bid to prevent a financial crisis, the Chinese government has been trying discourage overspending by restricting an influx of investments in real estate and various industries. However the efforts were in vain with increasing capital from escalating exports figures.

It was reported recently that China's consumer price index in September was at 6.2%. With rising exports and lower imports, and a widespread of over-investment, the central government is working against the economy from overheating. However, the central bank expects inflation to rise above the government's target of 3%.

Registered SMEs in China surpass 4.3 million

Li Zibin, chairman of China Association of Small and Medium Enterprises Chairman, said that the total number of SMEs registered by the Ministry of Commerce and Industry has exceeded 4.3 million. The aggregate value of products and services created by SMEs accounts for 58.5% of the nation's gross domestic product.

Sources said that taxes paid by the SMEs currently contribute to 50.2% of the country's total. Patents and new products developed by SMEs accounted for 66% and 82% of the country's total respectively. SMEs' role in easing the pressure on employment has also been further enhanced.

Li said that although China's SMEs have entered a good period of development, financing difficulties, a shortage of talents, the relatively weak ability of independent innovation, and the imperfect social service system are still constraints to the development of SMEs.

As of June this year, China's five major commercial banks, namely the Industrial and the Commercial Bank of China<601398><1398>, the Agricultural Bank of China, the Bank of China<601988><3988>, the China Construction Bank<601939><939> and the Bank of Communications<601328><3328> have granted RMB 1.5 trillion worth of loans to a total of 535,900 SMEs accumulatively, RMB 20 billion or 8.3% higher than the same period last year.

China Life's premium income surged in 1st 9 months

China's largest life insurer China Life Insurance Co<601628><2628> said in a statement to Shanghai Stock Exchange, that it had generated RMB 158.6 billion (US$21.1 billion) in premium income in the first nine months of 2007, increasing by 6.7% compared to the same period last year.

The statistics were calculated based on China’s new accounting standard.

According to the China Securities Journal, China Life's premium income increased by 34.2% from the period of August to September, totaling at RMB 15.3 billion.

China's second largest life insurer Ping An Insurance (Group) Company of China Ltd<601318><2318>, said that its premium income was at RMB 76.02 billion (US$10.1 billion).

Total premium incomes consisted of RMB 59.7 billion in life insurance, RMB 16.3 billion in property insurance, RMB 1.09 million in health insurance, and RMB 51.54 million in endowment insurance.

China Eastern to start Shanghai base operations

China Eastern Airlines Corp Ltd<600115><670> has set up an aircraft engine maintenance facility in Shanghai with U.S.-based United Technologies Corp's jet engine arm, Pratt & Whitney Corp.

The 15-year maintenance, repair and overhaul (MRO) service agreement, worth US$99 million, was signed in late 2006. The U.S. Original Equipment Manufacturer (OEM) aims to provide service between 200 to 300 CFM56 engines a year when it becomes fully operational to reduce engine overhaul costs and turn around time. The base is expected to start operations in 2008.

Pratt & Whitney has supplied about 270 CFM56 engines to China Eastern, which is currently the largest CFM56 operator in the Asia Pacific region. The Shanghai Pratt & Whitney Aircraft Engine Maintenance Co Ltd is the largest of its kind in Asia and is expected to bring China's MRO industry to a higher level.

Pratt and Whitney also has dealings with China Southern Airlines<600029><1055>, Air China<601111><753> and Hainan Airlines<900945><600221>. The new 250,000 sq. feet base uses the latest information technology systems and has been designed to meet the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED? Platinum standards.

Carding Tibet

CHINA UnionPay Co, the country's sole bank card clearing network, opened a branch in Tibet yesterday, its 30th outlet on the Chinese mainland. There are about 500 merchants, 200 ATMs and 802 points of sale using bank cards in Tibet.

Premium income jumps through Q3

CHINA Life Insurance Co Ltd, the nation's largest, increased premium income 6.7 percent to 158.6 billion yuan (US$21.1 billion) in the first nine months of this year, the company said yesterday in a statement to Shanghai Stock Exchange.

China Life received 15.3 billion yuan in premiums in September, 34.2 percent higher than the previous month.

On Thursday, Ping An Insurance (Group) Co of China Ltd, China's second-largest life insurer, reported that its premiums in the first three quarters amounted to 76.05 billion yuan. The total included 59.7 billion yuan for life insurance, 16.3 billion yuan for property insurance, 1.09 million yuan for health insurance and 51.54 million yuan for endowments.

PetroChina Parent's Third-Quarter Fuel Sales Rise 17

China National Petroleum Corp., the nation's largest oil company, increased fuel sales by 17 percent in the third quarter to meet rising domestic demand.

The company processed about 10 percent more crude and operated its plants at 99 percent of capacity during the period, the Beijing-based company said on its Web site today.

Chinese oil companies are increasing fuel output in the third quarter, when the nation's fuel demand normally peaks because of increased travel during school holidays. China National Petroleum and China Petrochemical Corp. were ordered by the government last month to boost fuel output to end shortages in Heilongjiang in the north and Fujian in the south.

"We have maximized capacities at our refining units this year to ensure fuel supply in the domestic market," China National Petroleum said in the statement.

The state oil refiner has imported more than 300,000 metric tons of oil products this year, including 200,000 tons of gasoline and diesel delivered to the coastal region in the third quarter, it added. The eastern sales unit has imported more than 100,000 tons of fuel at a loss of as much as 1,500 yuan ($200) a ton, it said.

China controls fuel prices to limit their impact on inflation. Chinese refining companies lose money when they process crude into fuel amid soaring crude costs and capped retail prices. Chinese oil companies also sell imported oil products at a loss as fuels are priced lower domestically compared with international prices.

Fuel Purchases

China National Petroleum bought 60,000 tons of gasoline for September delivery, traders involved in the transaction said Sept. 11.

Rival Sinopec Group, as China Petrochemical is known, bought two cargoes or 60,000 tons of gasoline at a loss in September. Sinopec Group will pay 6,800 yuan a ton for the imported cargo while domestic selling price is about 6,300 yuan a ton, it said Sept. 11.

Unit PetroChina Co. processed 611.4 million barrels of oil into fuels, or 5.2 percent more, in the first nine months, it said Oct. 15. Gasoline production fell 0.9 percent to 16.1 million tons and diesel output rose 7.9 percent to 35.5 million tons during the period.

The nation's oil demand will increase 5.7 percent to 7.6 million barrels a day this year, outpacing global growth of 1.5 percent, the International Energy Agency said in its September forecast.

Areva sees nuclear deal signed with China in Nov

Areva (CEPFi.PA: Quote, Profile , Research) expects nuclear reactors deals to be signed during the state visit of French President Nicolas Sarkozy to China at the end of November, the head of the French nuclear reactor group said on Thursday.

"China is a very important country for us.. We have negotiated agreements that are very interesting and we are waiting for the official signing," Chief Executive Anne Lauvergeon told the Senate television channel after being heard by a parliamentary panel on defence and national security.

French daily newspaper Les Echos reported on Wednesday that Areva's contract to supply two EPR nuclear plants to China was expected to be finalised at the end of November.

The contract is estimated to be worth around 5 billion euros ($7.13 billion).

Guohua Inner Mongolia Huitengliang Wind Farm Project Registered by EB

Guohua Inner Mongolia Huitengliang Wind Farm Project, developed by Guohua Xilinguole New Energy Co., Ltd. and purchased by Carbon Resource Management Ltd (UK) has bee successfully registered by EB on 18 Oct. The estimated annual CERs of this project is about 127,071 metric tonnes CO2 equivalent.

Market conditions to determine exchange rates: PBOC

Market supply and demand will predominantly determine the movement of RMB exchange rates in the future and free convertibility of RMB under capital accounts can ultimately be realized, said Zhou Xiaochuan, governor of People's Bank of China (PBOC) on Thursday.

Although Zhou did not disclose a defined timetable for the free convertibility of RMB, he revealed that the central bank will be making further adjustments based on market feedback.

With regards to the domestic economic situation, Zhou said that the central bank will be employing more drastic measures to prevent the economy from overheating and to curb the rate of inflation. Control measures adopted by the central bank include changes to interest rate and exchange rate, adjustments in bank reserve ratios, and open market operations.

Zhou also said that the central bank will be adopting new measures to curb excessive liquidity in the market. He felt that the central bank's monetary policies may have an inhibitory effect on the issue.

He added that excess liquidity in the market mainly came from China's rapid economic growth, income growth, the use of foreign exchange reserves, and the increase in foreign investment.

Chinese stocks decline on profit taking

China's stocks continued to close lower on profit taking on Thursday with the benchmark stock index slid 3.5%.

The key Shanghai Composite Index went down 3.5% or 211 points to close at 5,825.28 with turnover down from RMB 136 billion (US$18.11 billion) to RMB 133.64 billion(US$17.79 billion).

The smaller Shenzhen Component Index dropped 3.15% or 643.19 points to close at 18,681.35.

The sharply decline led by large caps such as big banks and steel makers.

Bank of Communications<601328><3328> fell 3.64% to close at RMB 14.82, while Industrial and Commercial Bank of China<601398><1398> slumped 4.02% to RMB 7.54, and Shanghai Pudong Development Bank<600000> tumbled 5.63% to RMB 51.65.

Baoshan Iron & Steel Co<600019> dropped 5.81% to close at RMB 19.29, while Wuhan Steel<600005> slid 7.14% to RMB 17.81.

Aluminum Corp. of China<601600><2600> lost 6.23% to close at RMB 50.72, while Baotou Aluminum Co<600472> dropped 6.71% to RMB 67.16.

Air China<601111><753> slumped 9.84% to close at RMB 22.82, while China Southern Airline<600029><1055> tumbled 9.94% to RMB 22.39, China Eastern Airlines<600115><670> declined 8.4% to RMB 16.35, and Shanghai Airlines<600591> went down 6.88% to RMB 20.02.

Anti-virus firm Rising to invest RMB 60 mln in servers update

China's largest and pioneer anti-virus company Rising Corp plans to invest RMB 60 million annually to upgrade servers nationwide. In addition, the company will be cooperating with banks, brokers and online gaming firms to provide a more secure password protection firmware to computer users, said the company's vice president Mao Yiding.

The company has already updated 300 servers, enabling the servers to automatically update users' Internet-linked computers through its new flagship product Rising Antivirus Personal Edition 2008, which differs from the traditional anti-virus products that require the users to update the contents of anti-virus software.

Meanwhile, Rising allows users to input key programs, such as online banking, games, and online stock trading, in a list to protect account information and password at a higher security level via cooperation with the program developers, the first company to offer such services on the domestic market.
Currently, Rising has established cooperation with 70 game firms, 30 brokers, banks and popular instant message service providers, including Guotai Juan Securities, GF Securities, China Merchant Bank<600036><3968>, MSN and QQ, said Mao.

Industry insiders said that Rising aims to differentiate itself from rivals through the new service, to gain a larger market share in China's growing Internet security market, valued at RMB 1.2 billion. According to iResearch, an internet research company, China's security market revenue is expected to grow at 16% in 2007 and is likely to hit RMB 1.7 billion in 2010.

China Eastern to start Shanghai base operations

China Eastern Airlines Corp Ltd<600115><670> has set up an aircraft engine maintenance facility in Shanghai with U.S.-based United Technologies Corp's jet engine arm, Pratt & Whitney Corp.

The 15-year maintenance, repair and overhaul (MRO) service agreement, worth US$99 million, was signed in late 2006. The U.S. Original Equipment Manufacturer (OEM) aims to provide service between 200 to 300 CFM56 engines a year when it becomes fully operational to reduce engine overhaul costs and turn around time. The base is expected to start operations in 2008.

Pratt & Whitney has supplied about 270 CFM56 engines to China Eastern, which is currently the largest CFM56 operator in the Asia Pacific region. The Shanghai Pratt & Whitney Aircraft Engine Maintenance Co Ltd is the largest of its kind in Asia and is expected to bring China's MRO industry to a higher level.

Pratt and Whitney also has dealings with China Southern Airlines<600029><1055>, Air China<601111><753> and Hainan Airlines<900945><600221>. The new 250,000 sq. feet base uses the latest information technology systems and has been designed to meet the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED? Platinum standards.

China opposes trade protectionism under pretext of product quality

China opposes some countries using product quality as a pretense to practice trade protectionism, Li Changjiang, director of the General Administration of Quality Supervision, Inspection and Quarantine, said here Wednesday.

"(Trade protectionism) not only affects China but also benefits no other countries," said Li, a delegate to the ongoing 17th National Congress of the Communist Party of China.

Li did not identify these countries, but called on relevant overseas manufacturers to organize toy imports from China as early as possible, so that their children could access China-made toys attractive both in price and quality before Christmas.

China, the world's largest toy manufacturer controlling nearly 60 percent of global toy trade, has come under spotlight amid a spate of export toy recalls, the recent one by the U.S. toy maker Mattel which this summer staged three separate recalls of China-made toys.

Bayer to acquire Topsun's OTC business at RMB 1 bln

Bayer Healthcare, a subsidiary of German-based industry giant Bayer, has received the approval from the Ministry of Commerce to purchase over-the-counter (OTC) cough and cold medicine business of Topsun Science and Technology<600771> at more than RMB 1 billion, thereby being the largest acquisition in China's pharmaceutical industry.

According to the acquisition agreement signed last year, Topsun will be transferring its manufacturing facilities, distribution networks, personnel and assets for OTC cough and cold medicines, including Xiaobai, Xinli and leading cold medicine Black & White, to Bayer Healthcare. The German company will pay another RMB 192 million, if the transfer meets the expected performance criteria.

With the assistance of Topsun's extensive distribution network and leading brand portfolio in the OTC market, Bayer could strengthen its OTC business and reinforce its presence in China, one of the fastest growing OTC market in the world

Topsun Science and Technology is a subsidiary of Topsun Group, one of China's largest private pharmaceutical companies. The acquisition will help the company to repay its debts and enable Topsun to focus on high-end medicines.

Sinochem sells shares of Qinghai Salt Lake for RMB 6.74 bln

Sinochem Corporation, China's largest state-owned fertilizer producer and trader, has agreed to sell 142 million shares of Qinghai Salt Lake Potash Co. Ltd<000792> at the price of RMB 47.49 per share, totaling RMB 6.74 billion, to Sinofert Co. Ltd, announced Sinochem on Tuesday.

The acquisition has been approved by State-owned Assets Supervision and Administration Committee of the State Council. Upon completion of the transfer, Sinofert will become the second largest shareholder of the Qinghai company with 18.49% stakes.

Sinofert Co. Ltd is a wholly-owned subsidiary of the Hong Kong listed company Sinofert Holding Corp<297>, of which Sinochem is the end shareholder. When Sinofert Holding planed for listing, Sinochem has promised not to invest or operate any business, which compete with Sinofert, as well as its subsidiaries. As Qinghai Salt Lake is competing with Sinofert Holding in fertilizer business, Sinochem has decided to sell out all its shares of the company to Sinofert.

ICBC plans to open a subsidiary bank in U.S.

Industrial and Commercial Bank of China (ICBC)<601398><1398>, the nation's largest commercial bank, plans to open a subsidiary in the U.S., said the bank's Board Chairman Jiang Jianqing, also a delegate in the ongoing 17th National Congress of the Communist Party of China today.

The new branch in the U.S. will be part of ICBC's global strategy, which involves other countries like Russia, Australia and the Middle East. ICBC is going to open a branch in Russia next month, two new branches in Dubai and Doha and overtake a bank in Sydney, according to Jiang. However, investment details have not been released by the company.

In its latest overseas expansion, ICBC is in talk with Macau's Seng Heng Bank, the second largest local bank in the region, to acquire 80% stakes of the bank at US$585 million. Seng Heng Bank currently owns 9 branches in Macau.

Apart from its global expansion, ICBC has undertaken several endeavors at home. Last month, China's banking regulator granted an approval for the bank to build a US$266 million leasing company in Binhai New Area of Tianjin.

ICBC is currently operating 16,807 domestic outlets and 98 overseas branches and representative offices. It has 1,326 correspondent banks worldwide.

China Shenhua Sept Coal Output Up 18% from '06 Average

China Shenhua Energy, China's top coal producer, boosted its commercial coal output in September by 18 percent from its 2006 monthly average, to 13.5 million tonnes, the company said on Tuesday.

Shenhua's coal sales totalled 18.9 million tonnes in September, up 32 percent from the 2006 monthly average. Of total sales, 1.9 million tonnes were exports, down 5 percent from the 2006 monthly average.