China drafts new acquisition rules
The China Securities Regulatory Commission has issued a draft of new rules aiming to regulate the acquisition of a controlling stake in a listed firm. The rules require an individual or group of investors holding 30% or more of a listed company to make a public announcement of any further stake increases. They also state that investors with a controlling stake in a firm cannot transfer control of the company within 12 months of the takeover, and that the listed company may not provide financial assistance to the controlling shareholder. CSRC did not say when the rules would take effect. (WSJ, 28 July)

China to let all banks sell forex to individuals
From August 1st, all banks in China will become eligible to sell foreign currency to local and foreign individuals. So far, Chinese nationals were restricted to buying foreign currency at the Bank of China, the country's biggest foreign exchange bank. (Dow Jones Newswires, 28 July)

Hong Kong businesses urge delay on Shanghai Disney
Hong Kong's tourism and hotel businesses have urged rival Shanghai not to build a Disney theme park "too soon", saying such a project would hit tourism in the territory which is already setting up a Disney park. Hong Kong is banking on its massive USD 1.8 billion Disney project to buoy its sagging economy and lure more tourists. (Reuters, 28 July)

Chinese gas-project pact stalls amid worries of losing control
Delays in announcing the winner of a USD 13 billion gas contract highlight official concerns over how much sway foreign companies will have in China's energy future. Behind the delay, say analysts, is China's effort to juggle commercial considerations with lingering fear that foreigners may undermine its energy security. (WSJ, 29 July)

China fights tax evasion by rich people
China has made big strides forward in rectifying the market economic order by prosecuting celebrities for tax evasion. Tax avoidance has become one of the social "cancers" of China. There were at least 200'000 enterprises in Beijing whose employees paid no individual income tax last year. Beijing municipal taxation bureau will begin to monitor individuals with annual salaries exceeding RMB 100'000 in over 300'000 enterprises. In addition, the 100 highest-paid people in each district or county will be listed as the key individuals under supervision. (People's Daily, 29 July)

China to have more cellphone users than fixed-line ones by 2003
CCID Consulting Co. estimated that by the end of 2002, the number of mobile-phone users in China would reach 210 million and that of fixed-line users 212 million. The number of mobile subscribers would surpass that of fixed-line users at the beginning of 2003. The report also predicted that China would have 45 million Internet users by the end of this year. (ChinaOnline, 29 July)

PetroChina on spree for more service stations
PetroChina, the country's No 1 oil company, plans to spend RMB 3 to 4 billion to acquire or build 1'500 oil and petrol retail stations this year, as part of an ongoing plan to solidify its position before the market's opening to foreign oil majors. Under China's WTO entry accord, the oil and petroleum retail sector will be opened to foreign participation next year and the wholesale market in 2005. (SCMP, 30 July)

Areas picked for logistics JV pilot programs
Several Chinese provinces and cities have been chosen for joint-venture logistics pilot programs. They include bureaux in Jiangsu, Zhejiang and Guangdong provinces, and in the cities of Beijing, Tianjin, Chongqing, Shanghai, and Shenzhen. The firms are expected to integrate transport, storage, loading, processing, packaging, delivery, information handling, and imports and exports as a complete supply chain with one-stop logistics services. This news could prove to be of great help to overseas logistics firms that have been looking at the Chinese mainland market for a long time, industry insiders have said. (China Daily, 30 July)

China replaces US as Taiwan's largest export market
China has surpassed the U.S. as Taiwan's largest export market, taking up a record 25% of the island's exports in May. In the first five months this year, China took 23.5% of the island's total exports. The U.S., which for decades had been the island's largest market, took up 20.6% of Taiwanese exports. The latest data take into account goods that were sent to China via Hong Kong. (Dow Jones Newswires, 30 July)

China suffers RMB 30 billion loss from tax evasion by multinationals
Officials from the State Administration of Taxation reveal China's tax revenue annually suffers a loss of RMB 30 billion due to multinational corporations' avoidance in tax. Sources reveal the central government and the State Administration of Taxation are intensifying the work for rooting up the "tax avoidance". (People's Daily, 31 July)

Foreign firms under microscope
Foreign companies are becoming the latest target of a drive by mainland authorities to crack down on widespread tax-dodging by high-income earners. The Beijing municipal government tax bureau said staff at some representative offices of foreign companies were found to have delayed payment of personal income tax, mainly due to a "misunderstanding of tax law". Personal income tax accounted for only 6.6% of the entire tax revenue last year, far less than the 20% of many developed countries. (SCMP, 31 July)

China's thriving fake drug trade kills thousands a year
Quality problems in China's drug industry have gained international attention in recent weeks, as five women in Japan and Singapore have died and 60 more been sickened after taking Chinese-made diet pills. Last year, 192'000 people in China died after using bogus or poor quality drugs, according to the Shenzhen Evening News. Production thrives in China because disregard for patents and copyrights is rampant. But a bigger problem, say experts, is collusion by local officials, who either take bribes from drug counterfeiters or don't want to lose the jobs and tax revenue that they provide. (Dow Jones Newswires, 31 July)

Urban residents slow down spending despite more income
During the first half of this year, the monthly disposable income gained by Chinese urban residents averaged RMB 657 per capita, 17.5% higher than that of the same period last year. Urban residents' monthly salary income averaged RMB 491 per capita, up 21.1% over a year ago. The monthly consumption expenditures of urban residents during the January-to-June period was RMB 494 per capita, 13.3% more than that a year ago. (ChinaOnline, 1 August)

Recovery rate falters for Asset Management Companies
Disposing of non-performing assets transferred from the country's four major state banks, the Asset Management Companies - Huarong, Cinda, Orient and Great Wall - recovered a combined RMB 45.45 billion in cash after disposing of RMB 210.36 billion in bad assets, achieving an accumulative cash-recovery ratio of 21.6%. The Ministry of Finance set a minimum cash recovery rate of 30%. Beijing set up the AMCs in 1999 to clear RMB 1.4 trillion in bad loans, mainly held by the four major state banks. (SCMP, 2 August)

Landmark cases test governance
Mainland courts have accepted two cases brought by shareholders against listed firms for giving false financial information, in a sign the government is getting tough on corporate governance. (SCMP, 2 August)

PBOC plans foreign lending cap
The People's Bank of China has unveiled plans confirming the worst fears of foreign bankers - that it might try to dodge WTO agreements by using its regulatory power to limit their access to the mainland banking market. Under a draft plan, the bank has proposed capping the amount of yuan that foreign banks can borrow on the local market to fund their lending business to just 40% of their yuan deposits. This would reduce foreign banks' capabilities in lending much-needed local currency to foreign investors to support their investment projects in China. (SCMP, 2 August)

Individuals seen driving car sales up 30%
In the first half of the year, car production was 1.54 million units, an increase of 30% over the same period last year, with production of passenger vehicles growing 33%. Forecast car sales for the full year are at three million units, of which one million will be passenger cars. Last year more than 40% of passenger car buyers were individuals and this year the figure will exceed 50%. In the first five months this year, car imports rose 31% over the same period last year, or 3.03% of China's car market and 5.92% of its passenger car market. However, in global terms, China remains a small player, with production this year accounting for just 5% of global car output of about 60 million. (SCMP, 2 August)

Beijing CBD lures more multinationals
The central business district of Beijing is home to 2'075 businesses, including 457 multinationals, more than that in any other CBD in the country. The monthly rent for A-class officebuildings in the CBD stands at USD 50 per square meter, which is almost the same price as that in New York, and 96% of offices are rented. Observers believe the prices of office buildings in a city's CBD directly reflect the degree of economic prosperity of that city and its global impact. A total of 14 real estate development projects are being constructed or are still in preparatory stages in Beijing's CBD. They will have a combined floor space of 3.3 million square meters and will cost RMB 47 billion (People's Daily, 2 August)

China's GDP expected to exceed 7.5%
The People's Bank of China released its second quarter report on monetary policy according to which China's GDP may exceed 7.5% this year. (People's Daily, 2 August)

Key state firms see earnings slip back
Profits at 511 large state firms slipped 8.7% year on year in the first half with more than 20% losing money, according to the State Economic and Trade Commission. The "key state firms" booked combined profits of RMB 116.6 billion in the first half. 115 were in the red, combining losses of RMB 7.55 billion, 5.6% up from a year earlier. (SCMP, 3 August)