CHINA BANKING AND FINANCE NEWSLETTER
Vol. 4, No. 1 - January 24, 2003
TOPICS THIS ISSUE:
- China's Industrial Output Rises To US$379b in 2002
- China Should Embark Upon Bank Reform
- Beijing Relocates 75% of Steel-making Capacity to Hebei
- Shanghai's Goal to Become International Financial Center
- Auto Sales Predicted to Hit 4 Million Units in 2003
China's Industrial Output Rises To US$379b in 2002
China's industrial output rose 12.6 per cent in 2002, driven by fast export growth and government efforts to expand domestic demand.
Industrial output reached 3.148 trillion Yuan (US$379.3 billion) last year, the National Bureau of Statistics said in a statement yesterday.
The growth was 2.7 percentage points higher than the previous year and also the highest growth since 1997, it said.
Seven major industries, including electronics and telecommunications equipment manufacturing, transportation equipment manufacturing and the chemical industry accounted for 58.5 per cent of industrial output.
Last year's economy grew by an estimated 8 per cent.
Zhang Xueying, a senior economist with the State Information Centre, said domestic investment and consumption, as well as exports, will continue to have a great impact on the country's industrial sector and the whole economy this year.
Liu Nanchang, deputy head of the General Economic Affairs Department at the State Economic and Trade Commission, said China's industrial output is expected to rise about 10 per cent this year, led by the automobile and electronics sectors.
Industrial growth this year was likely to be fuelled by robust output of cars, electronics products, machinery and chemical products.
Source: China Daily
China Should Embark Upon Bank Reform
Leading Chinese economists at a Symposium on China's financial Reform and Securities Market Reform urged China to embark on its planned bold attempt at banking reform to further facilitate the pilot scheme of private banks.
The plan needs to be carried out promptly, as the country is faced with the urgent task of quenching the cash thirst of small and medium-sized private businesses looking to develop, said experts addressing the Symposium on China's Financial Reform and Securities Market Reform.
"Establishing private banks is one of the core reforms in the highly risk-sensitive banking industry. Experimental work is thus essential," chief economist of the Asian Development Bank Resident Mission in China, Tang Min, told the symposium, which was jointly sponsored by Peking University and the University of Hong Kong.
Media reports earlier revealed that plans for a final private bank pilot scheme had been submitted to the regulatory authorities for approval, drafted by the Great Wall Finance Research Institute, which groups include some of the top economists in China.
Some of the country's largest private enterprises have been urging a policy change, anticipating that their stakes in private banks will give them access to easy finance and new channels to gain a foothold in the financial industry.
The government, however, has been cautious over the establishment of private banks, recalling the difficulties that occurred in the early 1990s, when private funds flooded the then newly accessible urban credit co-operatives, forcing the government to later rein in the banking industry.
Experts say that the government needs to introduce change, but in the process exert and proceed with caution.
Source: Peoples Daily
Beijing Relocates 75% of Steel-making Capacity to Hebei
China has begun relocating a significant part of its steel-producing capacity from the capital of Beijing to a neighboring province.
The 2.8 billion Yuan (about 341 million US dollars) relocation project consists of moving 75 percent of the iron and steel production capacity of Beijing Shougang Group from the city's western outskirtan area, formerly known as Capital Iron and Steel Company, to a rural part of Qian'an city in Hebei Province.
The move constitutes one of a series of measures carried out by Beijing municipality to reduce its industrial pollution during the period leading up to its hosting of the 2008 Summer Olympic Games.
Qian'an city is one of the country's four largest mineral resource centers in China.
The relocation project stipulates that, by the year 2008, China is expected to build an iron and steel plant in Qian'an with a designed capacity of turning out 2 million tons of iron and steel, 3 million tons of iron and steel by-products and 2.74 million tons of rolled steel or rolled steel plates.
Source: People's Daily
Shanghai's Goal to Become International Financial Center
Shanghai is hoping to make rapid progress in its efforts to become an international financial center in the next several years according to a municipal official.
In a speech delivered at a recent municipal meeting on foreign economic work, deputy mayor Jiang Yiren vowed to redouble efforts to attract more domestic and overseas financial organizations in order to improve the functioning of various financial markets.
"We will fully support the reform of financial organizations and will also work harder to improve the quality of financial information as well as regional financial cooperation," said the deputy mayor.
Jiang also pledged that Shanghai would take the lead in the country in establishing a social credit network consistent with international practices and China's situation.
Shanghai boasts a financial market network supported by a securities market, an inter-bank trading market, a bond market, a futures market and a gold market.
As of 2002, a total of 30 foreign banks had been approved to carry out Chinese currency transactions, and 23 others had been approved to deal in both Chinese and foreign currencies.
Four foreign banks have moved their Chinese operational headquarters to Shanghai, where two Sino-foreign capital management joint ventures and one Sino-foreign securities joint venture will soon be set up.
Foreign banks in Shanghai increased their operating capital by 528 million US dollars over the past year, and 36 domestic and overseas insurance companies made 24 billion Yuan (2.89 billion US dollars) in premium revenue last year, up 30 percent from 2001.
Source: People's Daily
Auto Sales Predicted to Hit 4 Million Units in 2003
Automobile demand in China is forecast to reach 4 million units this year. Sales of vehicles made in China will amount to between 3.7 and 3.9 million units this year, an increase of around 20 per cent from a year earlier, said the China Association of Automobile Manufacturers.
In 2002, sales increased by 36.65 per cent year-on-year to 3.25 million units, said the association Sales of domestically made passenger cars will amount to 1.4 to 1.5 million units this year, up from 1.13 million last year, according to the association.
Sales of domestically made trucks are expected to reach 1.25 to 1.35 million units this year, the association said. Sales of domestically made buses are expected to reach 1.3 million units in 2003.
Earlier this year, China cut its tariffs on vehicle imports from 83.8-50.7 per cent to 38.2-43 per cent as part of its commitment to the World Trade Organization.
China will offer a total vehicle import quota of US$9.1 billion this year, up from US$7.9 billion in 2002.
Turnover of China's auto industry as a whole will total 770 billion Yuan (US$92.8 billion) this year, up from 646.5 billion Yuan (US$77.9 billion) last year, the association predicted.
The industry's profits will increase to 60 billion Yuan (US$7.23 billion) this year from 43.1 billion Yuan (US$5.19 billion) in 2002, according to the association.
But the association revealed four of China's 16 key State-owned automakers were still in the red last year - Beijing Automotive Industry Corp, Tianjin Automotive Industry Corp, Jinbei Automobile Co and Nanjing Automobile Group.
Source: Xinhua
A Licensed Chinese Law Partnership
http://www.lehmanlaw.com
Beijing Office | Shanghai Office |
6th floor, Dongwai Diplomatic Office Building
23 Dongzhimenwai Dajie
Beijing 100600 China
Tel.: (86)(10) 8532-1919
Fax: (86)(10) 8532-1999
Email: mail@lehmanlaw.com | Suite 1310, Kerry Centre
No. 1515, West Nanjing Road
Shanghai 200040 China
Tel: (86)(21) 6288-2698
Fax:(86)(21) 6288-2699
Email: shanghai@lehmanlaw.com |
The China Finance News is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
