EMBASSY OF SWITZERLAND


CHINA BUSINESS
BRIEFING (*)

02 April - 08 April 2001

No 41


Swiss Exports to China up 100% in January
Sino-Swiss Trade amounted to CHF 324.3 million in January, up 61.7% from the same period of last year. Imports from China to Switzerland rose 48.3% to CHF 220.4 million while exports from Switzerland to China went up 100.1% to CHF 103.9 million. Meanwhile, Swiss exports to Hong Kong (up 49.2% to CHF 290.2 million) and Taiwan (up 36.5% to CHF 124.8 million) also developed very nicely. (Embassy of Switzerland, 4 April)
Corrigendum:
CBB 41 proudly heralded that Swiss Exports to China were up 100.1% in January from the same period of last year. Meanwhile, the State Secretariat for Economic Affairs informed us that their figures were wrong; they in fact compared the trade figures of January 2001 with those of 1999. 
Unfortunately, the correct figures are rather less exciting: Chinese imports to Switzerland rose to CHF 220.4 million (+8.4%), while Swiss exports to China rose to CHF 103.9 million (+29.7%). Total trade increased to CHF 324.3 million (+14.4%). Imports from Hongkong went up to CHF 63.0 million (+15.2%), while exports to Hongkong decreased to CHF 290.2 million (-3.9%). Imports from Taiwan went down to CHF 99.1 million (-16.7%), and exports to Taiwan went up to CHF 124.8 million (+32.4%). (16.4.2001)

Swiss Novartis posts 25% sales growth in China
Switzerland based Novartis had an auspicious year 2000 in China, with total sales rising 25% to RMB 950 million. All the four business departments of Novartis (China) posted sales growth for 2000. CIBA Vision led all by a hefty 50%. Novartis Pharmaceutic AG ranked second and posted 27% sales growth. Meanwhile, Consumer Health reported growth of 18%, while Animal Health posted 12% growth. Meanwhile, the company announced that it will further expand the production scale of its pharmaceutical plant and broaden the business scope of nonprescription drugs, infant products and medical nutrition products in the Chinese market. So far, Novartis has established three joint ventures and two single-investor enterprises in Beijing, Shanghai and elsewhere since re-entering China in 1979. Employing 1'200 workers, Novartis (China) has a total investment of about USD 100 million in the mainland. (ChinaOnline, 2 April)

Yahoo leading portal in Greater China
US-based Yahoo is the leading portal in Greater China, challenging the assumption this region favors homebred content providers. Yahoo-sites drew 52.8% of all home Internet users in Mainland China, Taiwan and Hong Kong, while favorite Sina got a second place with 45.0%. In mainland China Yahoo still remains on the fifth position. (www.cbiz.cn, 1 April)

Beijingers spend USD 906 million yearly on home improvement
Beijing residents spent about RMB 7.5 billion last year on refurbishing and redecorating their homes, RMB 4.5 billion of that total on materials alone, according to a recent report released by the Beijing Municipal Statistics Bureau. (ChinaOnline, 2 April)

Private sector maintains 40% growth
Private enterprises continue to grow at a rapid rate with spurts as high as 40%. During 2000, private enterprises created 4.58 million new jobs. The grew enough to provide employment for 1.07 million laid-off workers and absorbed 1.99 million surplus rural laborers. On average, 809 new private enterprises emerged every day in the country. By the end of the year, there were 295'300 new private enterprises, bringing the total number of registered enterprises to 1.76 million. (ChinaOnline, 3 April)

Rules for foreign exchange adjusted in favour of foreign banks
China will soon adjust regulations for selling and payment of foreign exchange by foreign banks to place them on an equal footing with domestic banks. After the amendment, foreign banks in China would be allowed to provide foreign exchange buying and selling services to non-foreign funded enterprises in the country. (China Daily, 3 April)

China lowers business tax for financial sector
China announced that it will lower the business tax rate for the financial and insurance sectors by 3 percentage points in the next three years. Local analysts say that the tax cuts will be a boost to the expansion of financial and insurance businesses in China. (Xinhua, 3 April)

Trading goal set for machinery
According to Zhou Keren, vice-minister of MOFTEC, China aims to import and export USD 360 billion worth of machinery and electronic products by 2005, which represents an increase of 12% each year. Export of high-tech products should increase 20% each year to reach USD 90 billion by 2005, making up about 50% of China's machinery and electronic exports. (China Daily, 3 April)

China's foreign debt down 4% in 2000
By the end of 2000, China's registered outstanding foreign debt was USD 145.73 billion, decreasing USD 6.1 billion or 4% from the previous year. Of the total, medium- and long-term debt accounted for USD 132.65 billion, or USD 4 billion less than the previous year; short-term debt was USD 13.08 billion, decreasing USD 2.1 billion. (Xinhua, 2 April)

ADB sees mainland growth as fastest
Asian Development Bank has forecast China will be Asia's fastest-growing economy with an estimated rise in gross domestic product of more than 7% this year and next. The projection came days after the World Bank estimated a 7.3% increase for this year. (SCMP, 4 April)

Shanghai closes "paper companies"
Shanghai has closed 4,000 "paper companies" and cancelled their their operation licences. These shell companies have no offices, no assets and no employees. They are usually fronts for white-collar crime. (China Central TV, 4 April)

Shangri-La Hotels plans USD 400M expansion
Shangri-La Hotels and Resorts has announced plans to pour USD 400 million in the coming four years into building two new hotels in Fuzhou and Shanghai and expanding the Pudong Shangri-La in Shanghai. The two projects have been delayed because the sluggish hotel industry of recent years had deterred Shangri-La from building any new hotels. Experts believe that the country's hotel industry is showing signs of recovery. (ChinaOnline, 4 April)

Beijing to maneuver foreign investment to key sectors
The Beijing municipal government will attempt to increase levels of foreign investment by actively guiding such investment into key industries, including the high-tech industry, infrastructure construction, building renovations and the service sector. In order to attract more foreign investment to the high-tech industry, Beijing will adopt preferential policies in terms of input, loans, use of land and taxation. In addition, the municipal government will promote equity and contractual joint ventures related to tourist facilities and services, as well as fields like education, culture, sports and health care. (ChinaOnline, 4 April)

Chinese drinkers prefer domestic wine, liquor
In a major turnaround for China's alcohol consumption patterns, the import market for wine and liquor has cooled because of high prices, according to a recent survey conducted among urban residents of eight major Chinese cities. Only 3.7% of those surveyed list foreign brands as their first choice. Among the consumers who have ever purchased wine or liquor, 99.2% bought domestic wine and only 10.2% purchased imported wine. Major factors influencing the purchasing decision are personal taste, brand name and price. (ChinaOnline, 4 April)

Premier: Order crucial to market economy
Premier Zhu Rongji called for greatest efforts to be made to maintain market order and create a sound environment for the country's modernization drive. He told a national conference that a campaign should be promptly launched across the country to rectify and regulate the economic order. Economic disorder includes fake commodities, tax evasion, smuggling, cheating in foreign trade and foreign currency exchanges, lack of credit and failing to live up to contracts. There has been an increase in crimes in the economic sector as well as accidents in the work place. (China Daily, 5 April)

McDonald's enters Xi'an
McDonald's will open its first restaurant in Xi'an in June and add a second by December. The US fast food chain had opened 337 restaurants in 66 Chinese cities by the end of February. (Xinhua, 5 April)

91% of U.S. firms in China optimistic about their business
A report released by the American Chamber of Commerce in China shows that in terms of the outlook for their business in the next five years, 45% of the U.S. firms interviewed are optimistic, 46% cautiously optimistic and only 1% slightly pessimistic. For future plans, 61% state they intend to slowly expand their business in China, 24% prefer speedy expansion and only 1% plan to withdraw investment from China. When asked to evaluate the investment challenges in China, 67% say the bureaucratic system is the biggest challenge. The second biggest is human resources, cited by 56%. The third is the transparency of policies, (43%). The fourth is corruption (42%). The fifth is market access (38%). (ChinaOnline, 5 April)

Best-selling brands in Shanghai mostly international
A market report released by the Shanghai Business Information Centre showed that international brands produced by joint ventures, including home appliances, telecommunications equipment, cosmetics, dairy products, paper and beverages, accounted for nearly 60% of the market share. (ChinaOnline, 5 April)

Bank reform needs one year
The China Construction Bank said it needs another year for the completion of its internal restructuring, which will pave the way for a final public flotation. The reform strategy will involve upgrading and improving the bank's organization framework, planning management, credit policy, its information and technology systems, internal controls, and payment systems. (China Daily, 6 April)

Price wars in tough market take toll on TV makers
Earnings of China's leading TV makers tumbled last year due to tough internal competition. Price wars brought by blind expansion forced some players to leave the market, and even the strongest contenders were bruised, leaving the sector ill-placed for an expected foreign onslaught after China joins the WTO. Saturation of demand, over-capacity and a lack of technology royalties also contributed to dismal sector performance. Curiously, most foreign-invested TV producers, who did not join the price-wars, saw their mainland market share grow to about 25% from 18% in 1999. (Reuters, 6 April)

China issues more treasury bonds
China will issue RMB 20 billion worth of certificate treasury bonds in addition to this year's first batch of T-bond issuance. The announcement followed the issuance of RMB 60 billion worth of T-bonds that began March 1. The additional treasury bonds will have a fixed term of five years and a par annual interest rate of 3.14%. (Xinhua, 6 April)

B shares continue consolidation
Chinese hard-currency B shares were able to gain for an eighth straight week in Shanghai, but lost for the first time out of the past seven weeks in Shenzhen. The trend in Shanghai showed steady consolidation, inheriting strength from the past two months, while that in Shenzhen had been an inclination to downside correction. (People's Daily, 6 April)


China Business Briefing is a random selection of business related news gathered from various media and news services covering China, edited by the Embassy of Switzerland in Beijing and distributed among Swiss Government Offices and other interested parties. The Embassy does not accept responsibility for accuracy of quotes or truthfulness of content. Upon request and depending on the resources available, the Embassy will provide further information on the subjects mentioned in the China Business Briefing.
vertretung@bei.rep.admin.ch 

15.4.2001

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