CSFB CEO to visit China, aims to stop blacklisting
Credit Suisse First Boston Chief Executive John Mack arrives in Beijing Saturday for talks aimed at persuading officials to stop blacklisting the investment bank from deals in China, CSFB executives said. Beijing recently ordered CSFB dropped from the team of foreign underwriters handling a multibillion-dollar share offering by China Unicom Ltd., the country's second-largest mobile phone operator, after the banking giant organized meetings between Taiwan's Finance Ministry and money managers in Europe earlier this year. CSFB fears it will be excluded from at least two other pending underwriting deals. While Beijing has barred foreign companies in the past for perceived transgressions, the CSFB case appears to be the first time Chinese authorities have punished a company for helping Taiwan promote investment on the island. (AWSJ, 12 October)

ABB gets USD 360 million order for China power transit job
Swiss-based engineering group ABB Ltd. has won a USD 360 million order from State Power Corporation of China. Under the contract, ABB will build a 3'000 megawatt link delivering power from hydroplants in central China to the industrial region of Guangdong, 940 kilometers away. ABB said the order was the second major project in China in two years. (AWSJ, 12 October)

Rolex wins China court battle over Internet site name
Swiss watchmaker Rolex has won a legal battle in China to prevent a local Internet firm using the domestic rolex.com Internet site address. The People's Intermediate Court in Beijing has ruled Chinese Internet service provider CINET had no rights to the rolex.com.cn web address. CINET was also ordered to pay RMB 10'000 in compensation to Rolex for registering the address. (People's Daily, 9 October)

Hong Kong launches new stock index
Hong Kong launched a new stock index, the Hang Seng Composite Index. The new index comprises the top-200 stocks listed in Hong Kong, covering 90% of the Hong Kong main board's total market capitalization. It shall consists of two regional sub-indices: the Hang Seng Hong Kong Composite Index and the Hang Seng Mainland Composite Index. The Hang Seng Mainland Composite Index combines the red-chip index of China-affiliated companies and the H-share index of Hong Kong-listed mainland companies. The constituent stocks of the red-chip index have been reduced from 47 to 27 and those of the H-share index from 54 to 25. Despite the launch of the new index, the Hang Seng Index (HSI)-which counts 33 constituent stocks and covers 80% of the market's total capitalization-will remain the most important benchmark in Hong Kong. (ChinaOnline, 4 October)

Two telecom giants join hands
China Telecom and China Unicom, the country's two dominant telecom carriers, signed agreements to link their networks together, enabling users access to both networks. China Telecom is the leading fixed-line telecom operator while China Unicom ranks No 2 in the mobile business. (China Daily, 8 October)

State sees tax revenue increase
Tax departments across the nation collected RMB 1'009 billion of tax revenue during the first eight months of this year, an increase of 24.5% from the same period last year. Value-added tax, consumption tax and income tax are the major contributors to the revenue increase, due largely to the improvement of companies' performances. China plans to gradually shift its value-added tax levy. Instead of taxing production, it will target consumption. The country will also expand the scope of consumption taxes to cover more goods and services. (China Daily, 8 October)

Gas pipeline project delayed
The State appears to have adjusted its timetable for the kick-off of the long-awaited west-east natural gas transmission project after concluding that more work is needed to tap the potential market. An official from the State Development Planning Commission said the start of the project, previously scheduled for the end of September, will be put off primarily due to unfinished co-operation talks with foreign firms. The project aims to build a 4'000-kilometre long pipeline to transport gas from west China's Tarim Basin in Xinjiang Uygur Autonomous Region to the coastal Shanghai in the east. (Business Weekly, 9 October)

"Golden Week" yields near RMB 25 billion tourism revenue
Statistics from National Tourism Administration and National Bureau of Statistics told that the just ended "golden week" tourism October 1-7 had yielded a revenue of RMB 24.98 billion, registering a 7% growth over last year. (People's Daily, 9 October)

Survey highlights growth of emerging middle class
Mainland Chinese earning at least RMB 60'000 a year make up 10% of the country's urban population, according to a State Statistics Bureau survey. Average incomes on the mainland range from RMB 435 a month in the Jilin province to RMB 1'033 in Zhejiang. The bureau concluded that most of the higher-income earners were between the ages of 30 and 40 and formed the basis of an emerging mainland middle class. The bureau predicted there would be about 200 million middle class people on the mainland in the next five years, or about one-seventh of the population. (SCMP, 10 October)

S&P reaffirms China credit rating
Standard & Poor's has left China's key credit ratings unchanged after its latest annual review of the country's economic and fiscal outlook. The ratings were last downgraded by a single notch in July 1999 and mean S&P continues to take a more negative view of China than does either of its ratings' rivals, Moody's and Fitch. (SCMP, 10 October)

MOF to take HKD 7 billion in Bank of China bad loans
Bank of China plans to transfer up to HKD 7 billion in non-performing loans from its Hong Kong unit to China's Ministry of Finance to clear the way for a stock listing. The non-performing assets to be transferred to the ministry make up less than half of the estimated HKD 15 billion in bad loans on the Bank of China (Hong Kong)'s books after a recent restructuring. (Dow Jones Newswires, 10 October)

Officials punished for corruption amid China's resolve to eliminate fraud
Two of the highest ranking officials in Shenyang, provincial capital of Liaoning Province, were handed death sentences after being convicted of corruption. Former mayor Mu Suixin was sentenced to death which the court reprieved for two years while his deputy, Ma Xiangdong, was sentenced to be executed. Other officials convicted were the former president and two vice-presidents of the Shenyang Intermediate Court and the former procurator-general of Shenyang. (China Daily, 11 October)

China's postal sector sees profit
China's postal sector has ended decades of loss, logging RMB 160 million of earnings for September. (China Daily, 11 October)

People still favour savings
A recent inquiry by the People's Bank of China shows that people are more willing to have their money deposited in banks than invest it in stocks and government bonds. The inquiry also shows that only 10.5% of depositors believe withdrawing deposits to buy stocks is worthwhile under the current price level and interest rate. The percentage is the lowest since 2000. Chinese residents' deposits reached RMB 7.06 trillion (USD 852.7 billion) at the end of August. (China Daily, 11 October)

US jitters seen driving investment to China
According to a leading US venture-capital firm, International Data Group (IDG), the flow of venture capital to China will increase as uncertainty heightens in the United States after the September 11 terrorist attacks. In the next 12 months, the group's China-based venture-capital arm, IDG Technology Venture Investment, plans to invest USD 50 million in about 20 high-technology companies. (SCMP, 11 October)

Online trading in shares soars
Online stock trading has grown rapidly in China, with more than 5% of transactions now on the Internet compared with about 3% in the first quarter. In August, the total value of online stock transactions in China amounted to RMB 29.5 billion. The number of online accounts in the mainland rose to RMB 3.01 million. (SCMP, 11 October)

China sets goals for future market rectification
China will examine the building industry, the power price in rural areas, land-use and house-building fees, and the cotton and sugar markets, to try to sort out the chaos in the current market. Wang Yang, vice-minister in charge of the State Development Planning Commission, made the statement at a teleconference on redressing disorders in the current economic market. (People's Daily, 12 October) "Chaos" was the term chosen and published by People's Daily.

Japan carmakers see USD 3.5 billion loss from China tariffs in 2002
Japan's automakers may lose JNY 420 billion (USD 3.47 billion) in export sales next year if China keeps punitive tariffs on Japanese cars. Sales of Japanese cars to China have virtually ground to a halt, and automakers are worried that their European and American rivals will leave them behind in the race for a share of Asia's biggest potential market. (AP, 12 October)

Direct aviation links across the Taiwan Straits
Civil aviation authorities on the mainland and Taiwan Province agreed that both should start direct aviation links across the Taiwan Straits as soon as possible. They said direct transportation is the desire of all Chinese people across the Taiwan Straits, and direct flights will help airlines greatly cut short operation costs. (China Daily, 13 October)

China Hi-Tech Fair shows signs of fatigue
The third annual China Hi-Tech Fair opened in Shenzhen with its usual fanfare and plenty of optimism about the future of the special economic zone's information technology industry. Three years on, however, the fair is showing signs of fatigue and Shenzhen's hi-tech ambitions are up against some daunting obstacles. Shenzhen's export in the first nine months of this year grew 5.9% to USD 26.7 billion - much less than originally projected. After Shenzhen's ambition to become a major financial centre was thwarted in the late 1990s by a central government bent on boosting Shanghai instead, Shenzhen decided to put all of its eggs in the hi-tech basket. The second board, which was intended to nurture worthy start-ups but has been put on seemingly permanent hold by Beijing, was central to Shenzhen's vision of itself as a world-class hi-tech centre. (SCMP, 13 October)

Kentucky Fried Chicken chain stores grow to 500 in China
Tricon Global Restaurants Inc., U.S.-based owner of the KFC brand, said it has opened more than 500 KFC chain stores in China. During the previous 11 months in 2001, KFC has set up 100 stores in west and north Chinese cities, with a total investment of RMB 300 million. Since Tricon opened its first KFC store in Beijing in 1987, KFC has processed 240'000 tons of chicken in China. In 2000, the KFC stores in China purchased RMB 800 million worth of raw materials at local markets. (People's Daily, 13 October)

Chinese trade grows 9% from January to September
Chinese trade volume in the first nine months of 2001 reached USD 376.37 billion, up 9% from the same period of last year. China's exports went up by 7% (to USD 194.98 billion), while its imports grew 11.2% (to USD 181.39 billion). Imports and exports related to foreign-funded enterprises increased by 11.1% (to USD 189.76 billion), accounting for 50.4% of the total trade volume. (People's Daily, 13 October)

Weekly Market update		12 October 2001	28 September 2001
Shanghai A		1764.98	1844.29
Shanghai B		155.03	151.55
Shenzhen A		514.28	541.61
Shenzhen B		252.55	241.83
		730.79	5 October 2001
Hong Kong Red Chip		1245.66	1246.44
Hong Kong H		1691.18	1749.88
Source: South China Morning Post