World Bank loans to help China restructure
The World Bank will provide up to USD 1.3 billion of loans to China each year from 2003 to 2005. With the loans, the World Bank will help China accomplish two major transitions - from a rural and agricultural society to an urban and industrial society, and from a centrally planned economy to a more globally integrated market-based economy. The bank will also focus on helping China address the needs of poor and disadvantaged people and less developed regions, as well as set up an environmentally sustainable development mechanism. (People's Daily, 21 Dec)

WTO

China says successfully passed WTO review
Despite some grumbles by China's trading partners, WTO members have given a positive assessment of the country's first year as a member, a Chinese trade official said. While some countries have complained about implementation problems or continued trade barriers in specific areas - notably restrictions on service-sector companies and agricultural imports - none has so far lodged a formal complaint alleging China violated WTO rules. (Dow Jones, 20 Dec)

Agriculture industry belies trade bloc anxieties
Despite some gloomy predictions, China's agriculture industry suffered less impact than expected from WTO entry, and its favourable trade balance continued to expand. The trade surplus for agricultural products grew to USD 4.4 billion in the January to October period, up 51.4% compared to the same period last year, accounting for 17.8% of China's overall favourable balance of trade. (Business Weekly, 17 Dec)

China and Taiwan officials discuss trade
Trade officials from Taiwan and mainland China have held talks in Geneva for the first time since the rivals joined the WTO. The meeting at a Geneva hotel marked a softening of Beijing's refusal to hold official contacts with Taipei and set a potentially important precedent for future talks between the rival sides. The talks were about China's recent imposition of market safeguard action against a range of steel products, some produced by Taiwanese companies. (FT, 16 Dec)

Finance

China to let insurance firms set auto insurance premiums
China will allow insurance companies to create policies and set premiums for auto insurance, a move that is likely to lower insurance costs for drivers and encourage more car purchases. At present, firms sell vehicle insurance at uniform prices set by the regulator. Those premiums are relatively expensive, and are one of a number of costly expenses for Chinese wanting to buy cars. (Dow Jones, 19 Dec) How about opening this very attractive market to foreign insurers?

China welfare picks fund managers
The mainland's thinly stretched national welfare fund has picked six fund management companies to help it invest about USD 3.4 billion in domestic stock markets for the first time. China hopes share investments will boost the small returns of the welfare fund. The welfare fund could also inject much-needed liquidity into share markets, which have seen turnover shrivel after a steep, 19-month downtrend. (SCMP, 19 Dec)

China's central bank to ease monetary policy temporarily
The People's Bank of China offered to add CNY 20 billion to the local money market, at least temporarily reversing a policy that has seen it tighten credit each week for about six months. (Dow Jones, 17 Dec)

Mainland brokerages fear flood of lawsuits
Mainland brokerages are feeling the chill as a growing number of minority shareholder suits against fraudulent listed companies head for the courts. The apprehension became keener on the heels of last month's landmark case in which a major Chinese brokerage agreed to pay compensation to minority shareholders of a firm whose listing it sponsored. (SCMP, 16 Dec)

China sold record USD 106 billion of bonds in 2002
China's government sold a record USD 106 billion this year to pay for roads, bridges and other projects that fueled the fastest growth of any major economy. China says its government debt amounts to 16.3% of GDP, compared to 60% in the U.S. and about 140% in Japan. Its deficit will reach a record CNY 309.8 billion yuan this year. (Bloomberg, 14 Dec)

Business

China's first car rental JV set up in Shanghai
China's first car rental equity joint venture was established in Shanghai. Anji Car Rental & Leasing Co Ltd, is jointly owned by Shanghai Automotive Industry Sales Corp and Avis Europe, which represents the US-based car rental giant Avis. The new firm expects to establish over 70 car rental outlets nationwide. (China Daily, 19 Dec)

Tsingtao Brewery expands to wine, catering to China's new taste
Tsingtao, China's largest beer maker, said its parent started selling wine for the first time in its 99-year history, joining 50 other winemakers catering to a new taste among the urban middle class. China's fledgling wine market posted a 16% rise in sales to CNY 5.1 billion yuan last year. Still, beer and fiery liquors are the drinks of choice for most Chinese. (Bloomberg, 18 Dec)

Newsweek to launch China edition
Newsweek plans to launch a Chinese-language edition in China and Hong Kong starting sometime next year. (AP, 16 Dec)

Automotive

GM makes further inroads into China with 4th venture
General Motors announced a fourth auto venture in China, sharply boosting its manufacturing capacity and competitiveness in the world's fastest-growing car market. The U.S. auto maker and its local partner, SAIC, will invest USD 108 million to take control of a plant in northern China that once assembled cars for South Korea's now-bankrupt Daewoo. (WSJ, 20 Dec)

Provincial government grabs Brilliance at a discount
The Liaoning provincial government will pay HKD 144.61 million to take control of Hong Kong-listed Brilliance China Automotive Holdings at a 93.1% discount despite protests from the company's ousted high-profile founder Yang Rong. (SCMP, 20 Dec) Sounds like a good deal. Or does it?

Honda to double vehicle output in China
Japan's Honda Motor Co plans to double its vehicle output in China next year as an important part of its global expansion strategy. The company's joint venture in Guangzhou will produce and sell 110'000 vehicles next year - up from the expected 59'000 units this year - and plans to increase its annual capacity to 240'000 units by 2004. (China Daily, 20 Dec)

China's car sales hit one million for first time
Annual car sales in China have topped the one million mark for the first time. An official at the China Association of Automobile Manufacturers said 1.02 million cars were sold in China in the first 11 months of this year, representing a 55.4% jump from the same period in 2001. While auto demand is expected to climb steadily, industry experts said this year's heady jump was unlikely to be repeated. (Reuters, 16 Dec)

IT

China plans digital cable TV in all major cities by '05
China's government plans to make digital cable television available in all of the country's major cities by 2005, signaling it has finally judged the technology ready for mass-market use after years of small trials. Chinese officials are aware that to improve the returns from the cable business, they are going to need to offer programming that interests viewers enough for them to pay the premium over existing analog cable services. But China still has extremely tight restrictions on how much foreign programming can be broadcast, which suggests there could be greater rewards for foreign media companies who create programming in China, rather than import it. (Dow Jones, 20 Dec)

Mobile phone users top 200 million in China
The number of mobile subscriptions in China passed 200 million by the end of November this year. The total number of telephone users in China reached 412.99 million. The number of fixed line subscribers and mobile users increased by 32.31 million and 55.09 million respectively from last year. (People's Daily, 17 Dec)

Beijing

New mayors for Beijing and Shanghai

The central government has chosen two locally groomed technocrats to spearhead economic development in China's two most important cities. Meng Xuenong, 53, is expected to replace Liu Qi as mayor of Beijing next month, and Han Zheng, 48, will take over as mayor of Shanghai from Chen Liangyu in February. Both Mr Liu and Mr Chen will remain as the party secretaries of Beijing and Shanghai respectively. (SCMP, 21 Dec)

Shanghai

Shanghai plans huge investment in new materials sector
Shanghai plans to invest CNY 200 billion in projects to produce new materials in the next decade. The investment would represent one quarter of the overall investment Shanghai planned for its manufacturing sector over the next decade. (People's Daily, 19 Dec)

Shanghai's Pudong attracts multinationals
Foreign companies from 82 countries and regions have started up 8'397 businesses in Pudong, since the district was set up in 1990. Those businesses brought total investments of USD 42 billion. Among them, 174 of the American Fortune magazine's top 500 companies had invested in 328 projects in Pudong. (People's Daily, 17 Dec)

Shanghai first to set credit rating on loan candidates
Shanghai has introduced a rating "score" for all personal bank accounts with credit facilities in the city - to help lenders assess the risk of making individual loans. For more than two years Shanghai Credit Information Services had been collecting the credit records of 2.9 million Shanghai residents. The results and the system are now open to all the lenders who provided the data. (SCMP, 16 Dec)

Shanghai house prices up, mortgage loans down
Housing prices and sales in Shanghai are on the rise, but the growth of mortgage loans to apartment buyers began to dip in October. Experts attributed the phenomenon to the entry into the housing market of a large number of corporate and individual buyers from overseas and other parts of the country. (Shanghai Daily, 15 Dec)

Growth in Shanghai's exports lag nation's
Shanghai exported 14% more goods during the first 11 months of this year compared to the same period last year. But the figure continued to lag behind the national level of 21.6%. Analysts say they do not see any change in the lagging growth rate of Shanghai's exports com-pared with the country's in the short term because of high business costs in the city. (Shanghai Daily, 14 Dec)

Pearl River

WTO: Hongkong ruled by conglomerates, needs more competition
The Hong Kong economy is dominated by a few conglomerates and the lack of any comprehensive law to ensure competition could deter investment, the WTO says. Hong Kong officials said they had explained in detail to the WTO that the local approach to competition was "appropriate for Hong Kong's free and open economy." (AP, 19 Dec)