News Briefs

 

China allocates 28.6 bln yuan to support farmers

China’s central government has allocated 28.6 billion yuan (USD 4.2 billion) to support farmers, the Ministry of Finance said in a statement on March 1.

The bulk of the funding – 18.6 billion yuan (USD 2.74 billion) – would be used to subsidize farmers in growing improved varieties of crops such as rice, corn, and cotton.

The other 10 billion yuan (USD 1.46 billion) would subsidize purchases of farm machinery such as sowers and reapers, said the statement issued to Xinhua.

The funding aimed to improve motivation in agricultural production, and stabilize the country’s grain production, according to the statement.

Farmers across the country would be eligible for the subsidies.

The funding was on top of 86.7 billion yuan (USD 12.7 billion) of subsidy funding to grain-growing farmers nationwide in February. The financial support for agriculture came as severe drought continued in the nation’s west and south.

The National Meteorological Center (NMC) issued a drought alert on March 7 warning the severe drought would continue over the next three days.

The State Flood Control and Drought Relief Headquarters said on February 27 that the drought, which started at the beginning of February, had affected 69.6 million mu (4.64 million hectares) of arable land and left 12.7 million people and 8.4 million heads of livestock short of drinking water.

 

China budgets 1.05 trln yuan of fiscal deficit for 2010

China budgets 1.05 trillion yuan (USD 154.4 billion) of fiscal deficit this year to support economic growth as government revenue will fall significantly short of expenditures, says a government work report to be delivered by Premier Wen Jiabao at the parliament’s annual session on March 5.

The government vowed to keep the debt at “appropriate” level. The total deficit consists of 850 billion yuan (USD 124.5 billion) in central government deficit and 200 billion yuan (USD 29.3 billion) in local government bonds, which will be included in local government budgets, reads the report, which was distributed to the media before the opening of the Third Session of the 11th National People’ s Congress (NPC).

The government will continue to implement the policy of structural tax reductions to expand domestic demand and promote economic restructuring.

It will also keep running the package plan for dealing with the global financial crisis, and increase spending to complete work on projects now under construction, improve people’s well-being and maintain stability.

According to calculation of the Ministry of Finance, the planned budget will take up about 2.8 percent of the GDP.

China’s fiscal deficit hit 950 billion yuan (USD 139.2 billion) last year, a record high in six years, but still less than 3 percent of GDP.

 

Political advisor calls for legislation to tax e-commerce in China

China’s top legislature should quickly enact the taxation of e-commerce, as an increasing number of buyers and sellers are relying on business-to-consumer (B2C) and consumer-to-consumer (C2C) websites to buy and sell goods, a political advisor said here on March 9.

Zhu Yilong, member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body, made the proposal during the ongoing CPPCC session.

“Online shopping has become one of the mainstream commerce models in China, but few stores on B2C and C2C websites are registered or report their incomes to the taxation departments,” Zhu said. “We must fill the taxation vacuum.”

Currently, a person can start an e-commerce business on any B2C or C2C website in China after providing personal information and paying a certain amount of fees to the website.

According to his proposals, the National People’s Congress (NPC), the country’s top legislature, should move to regulate the e-commerce industry, mandate the registration of online stores and require the payment of taxes.

If the proposed legislation on e-commerce is enacted, China is expected to further boost its revenue from the booming online sales among the country’s 384 million Internet users.

Thousands of websites are hosting e-commerce in China, where spending on online shopping reached more than 250 billion yuan (USD 37 billion) in 2009, about 80 percent of which was carried out through Taobao.com, China’s fast-growing e-commerce hub.

 

China Mobile buys 20 pct of SPDB, becoming second largest shareholder

China’s largest mobile phone service provider became a strategic investor in a mid-sized bank based in Shanghai after a multi-billion dollar stock purchasing deal on March 10.

Guangdong Mobile, China Mobile’s branch in south China’s Guangdong Province, bought 2.2 billion shares of Shanghai Pudong Development Bank (SPDB) at the cost of 39.8 billion yuan (USD 5.83 billion), claiming 20 percent of the bank and becoming its second largest shareholder.

The deal would benefit China Mobile’s shareholders in the short, medium and long run, said the company’s President Wang Jianzhou.

The deal would expand SPDB’s capital adequacy from 4 to 10 percent, enough to support a three-year rapid development phase for the bank, said Wu Yonggang, an analyst with Guotai Junan Securities Company.

The two companies will launch extensive cooperation with each other, combining their capital and technological advantages, according to a strategic cooperation memorandum.

Shanghai International Group is the largest shareholder of SPDB. China Mobile will not seek to hold more than 20 percent unless consented by SPDB, according to the purchase agreement.

China Mobile would not involve itself in the operation of SPDB, Wang added.

 

3G fueled by 160b yuan in 2009

China’s three major telecom operators have built 325,000 3G base stations and invested up to 160.9 billion yuan (USD 23 billion) last year, according to the Ministry of Industry and Information Technology.

The ministry’s statistics show development of 3G has attracted nearly 589 billion yuan (USD 86.3 billion) of domestic investment and brought 36.4 billion yuan (USD 5.33 billion) of direct spending and 14.1 billion yuan (USD 2.07 billion) of indirect spending. It contributed 34.3 billion yuan (USD 5.03 billion) directly and 141.3 billion yuan (USD 20.7 billion) indirectly to GDP growth. It has also created 260,000 jobs directly and 670,000 indirectly.

By the end of 2009, China’s 3G users have reached 13.25 million, 5.08 million of which are TD-SCDMA (a Chinese 3G standard) users.

The ministry said that China will keep encouraging and promoting the development of TD-SCDMA technology.

 

JoyMain eyes on global market

Nanjing-based JoyMain Sci & Tech (JoyMain) told the press that the company is targeting at the global direct sale market.

JoyMain is specialized in a series of businesses like healthcare food, healthcare clothes, new energy, genetic testing and so on. The company got engaged in the direct sale in June 2009 and was encouraged by the good performance in China. Therefore the company plans to extend their business into the international market. In the press release on January 8, 2010, JoyMain said that Mr. Frankie Kiow and Mr. Grant Pace, veterans in direct sale market, respectively took global president and international president of the company. They are believed to be able to help JoyMain earn success in the world.

Mr. Wang Youshan, board chairman of JoyMain, said that JoyMain’s great research and development ability will be the key to the success.

Mr. Frankie Kiow and Mr. Grant Pace also expressed their confidence in JoyMain’s products and services in the press release. They said that the company has formed a management team responsible for global team and relevant development strategies will be available soon.

 

China to reopen pork market to US exports

China agreed to reopen its market to imports of US pork, ending a ban that went in place after the outbreak of the H1N1 flu last year, the US trade representative’s office said.

“This agreement is a win for America’s pork producers, whose safe and high-quality exports can now flow freely into China,” US Trade Representative Ron Kirk said in a statement announcing the agreement. “We look forward to working cooperatively to resolve additional issues, including a resumption of trade in beef.”

China, the world’s largest producer and consumer of pork, blocked shipments from 49 US states after the outbreak of the H1N1 flu that began last April. Concern about the H1N1 virus cut consumer demand and curbed US exports to major markets including China, resulting in losses among US producers.

Before China’s decision to prohibit imports from the US because of concerns about the H1N1 flu, US pork and pork variety exports to China were about 275 million US dollars in 2008, making it the seventh-largest US export market, according to the US trade representative’s office.

At a meeting between the two governments last October, China agreed to remove its ban on pork products. Since then the US and China have worked to implement this commitment. There is no risk to humans from consuming properly prepared pork and pork products, the US says.

 

China’s economic restructuring to benefit world economy

The transformation of China’s economic growth pattern will provide new opportunities for the world economy, a senior economist said here on March 21.

As the world’s third largest economy, China imports a trillion-plus US dollars worth of goods every year and is becoming the largest engine powering the world’s economic growth, Zhang Yutai, president of the Development Research Center of the State Council, said at the China Development Forum 2010.

China has great market potentials for green technology and high-tech exports as it endeavors to eliminate high-energy consuming and heavy-polluting industries as parts of its moves to transform the economic growth pattern, Zhang said.

Apart from creating huge demand for high-tech exports, the country’s efforts to save energy and cut emissions also make a great contribution to the global effort in tackling climate change, he said.

Zhang also suggested China open wider to the outside world, adding China’s fast economic development in the past 30 years was largely due to the opening-up policy.

The country will strengthen economic cooperation with the outside world and introduce more talents and advanced technology to push forward the transformation of the economic growth pattern, he said.

 

Singapore, Zhejiang seek new frontiers in co-op

Economic collaboration between Singapore and China’s Zhejiang province received another boost as Singapore companies and Zhejiang cities inked agreements to partner each other at the sixth Singapore-Zhejiang Economic and Trade Council (SZETC) meeting here on March 22.

At the meeting, the Council discussed and agreed on the 2010/ 2011 workplan, which will focus on six key areas, namely trade and economic, environmental services, transport and logistics, infocomm technology, tourism, and modern services.

The signings that took place during the meeting were Joint-venture Hangzhou-Singapore Eco-Park (HSEP) Investment Agreement, Memorandum of Understanding (MOU) between Jurong International and Zhoushan Municipal Government, MOU between International Enterprise (IE) Singapore and the Ningbo Municipal Government to extend its cross-sectoral collaboration to 2012.

According to data from the Zhejiang Foreign Trade and Economic Cooperation Department, in 2009, bilateral trade between Singapore and Zhejiang amounted to 1.99 billion US dollars, a decrease of 15 percent over 2.34 billion US dollars in 2008. Singapore’s exports to Zhejiang amounted to 675 million US dollars while imports from Zhejiang reached 1.32 billion US dollars in 2009.

In terms of investments, Singapore’s actual foreign direct investments (FDI) in Zhejiang hit 321 million US dollars in 2009 with 36 projects, an increase of 2.6 percent over 2008.

More than 50 officials and companies from Zhejiang are currently in Singapore for the SZETC meeting.