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CHINA TO LAUNCH MORE STIMULUS INVESTMENT IN SECOND QUARTER

(Xinhua)

The Chinese central government is expected to launch its third batch of stimulus investments in large domestic projects in the second quarter to further boost its economy, according to the China Securities Journal Tuesday, citing an unidentified source.

The central government has so far cashed in a combined 230 billion yuan ($33.82 billion) for its 4-trillion-yuan stimulus package announced last November to bolster the slowing economy, 100 billion yuan in the fourth quarter and 130 billion yuan in the first quarter.

The newspaper said the new money would continue to be poured in projects that could benefit people's livelihood, such as health and education sectors, big infrastructure projects, and housing for low-income earners. Previous investments were dedicated to similar purposes.

An official of the National Development and Reform Commission (NDRC) confirmed the new investment, but said the exact amount was not decided yet. He spoke to Xinhua Tuesday morning on condition of anonymity.

The newspaper said the second-quarter investment might be a larger amount than previous ones, as the government hoped to consolidate foundations for a possible economic recovery with more investment and the summer is a good time for construction work.

"It's good to cash in pledged investment as early as possible, because the economy is under deeper downward pressure in the first half," said Li Huiyong, a Shenyin & Wanguo analyst.

The central government has made arrangements on nearly 40 percent -- 230 billion yuan out of 590 billion yuan -- of the first half of its promised two-year investment, at 1.18 trillion yuan.

"Early arrangement of such investment can leave room for new stimulus plans, if the two-year 4-trillion-yuan package does not work out very well," Li said.

Tuesday's report came after Premier Wen Jiabao said Thursday that the country would "soon" cash in the third batch of pledged central government investment as a means to further expand investment. He said the economy was doing "better than expected" thanks to government stimulus moves.

China's fixed asset investment picked up in the first quarter with an increase of 28.8 percent, which outperformed the annual rate of 25.5 percent last year.

Source: China Daily
http://www.chinadaily.com.cn
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China Business 0 Comment April 22, 2009, 9:26 am

WEN VISITS TRADE FAIR AS EXPORTS DECLINE

Ivan Zhai
Apr 21, 2009

Premier Wen Jiabao made a whirlwind visit to Guangdong following his appearance at the Boao Forum as figures showed the export powerhouse has suffered its worst slump in decades, sources said.

The premier visited the Canton Fair held in Guangzhou, after a quick visit to Shenzhen. Sources said he inspected two exhibition halls where household appliances were on display and he talked to exhibitors.

This came as the export-orientated province, once the country's economic engine, recorded its weakest growth in 20 years in the first quarter of this year. Guangdong's GDP growth shrank to 5.5 per cent between January and last month, a marked slowdown from 10.5 per cent growth a year earlier.

Mainland trade officials yesterday admitted they saw no light at the end of the tunnel for the embattled export sector. Mr Wen's sudden visit was not on his announced schedule and reflects the central government's concerns for the province.

This was the third visit by Mr Wen in the past two years.

His visit to the Canton Fair brought hope to many exhibitors. Some believed that Beijing may wheel out more policies to help stimulate the economy.

"We are hoping the central government can deliver more stimulus policies," said an exhibitor from Ningbo, Zhejiang province, who said her name was Shen.

Ms Shen said that when Mr Wen entered the exhibition hall, all the exhibitors applauded.

She added that manufacturers' main request to Mr Wen and Beijing was for more tax rebates to help them recover from last year's severe hit.

Ministry of Commerce officials said the value of the export orders for the first of three parts of the Canton Fair had dropped by 20 per cent compared with October's session.

The second part of the spring session will be held from Friday to next Tuesday, and the third part will be from May 3 to 7.

Known officially as the 105th Session of the China Import and Export Fair, it is held twice a year and is seen as a prime indicator for the export industry. Fair spokesman Mu Xinhai provided figures detailing a significant drop in business. Mr Mu said that by Sunday, 82,520 overseas buyers had signed contracts worth US$13.03 billion, a drop in value of 20.8 per cent and a decline in the number of buyers of 5.4 per cent compared with October's session.

The global financial crisis, which has resulted in weak demand from overseas, especially from developing countries, is regarded by mainland experts and officials as the main cause of the export recession.

"Amid shrinking foreign demand, our exports will remain low in the short term," Mr Mu said.

According to the official report released yesterday, demand from the mainland's traditional trading partners - the European Union, Japan, Australia and the United States - dropped by up to 38.6 per cent compared with last autumn.

Source: South China Morning Post
http://www.scmp.com...

China Business 0 Comment April 21, 2009, 9:15 am

CHINA TO MAINTAIN STABLE YUAN

By Wang Xu and Hu Yuanyuan (China Daily)

China said yesterday it will stick to its policy of maintaining a stable exchange rate, after the US Treasury Department said the yuan is undervalued.

"We will continue to promote the reform of the renminbi exchange rate mechanism, aiming to keep the renminbi basically stable at a reasonable and balanced level," Foreign Ministry spokeswoman Jiang Yu told a press conference. "It is in the interests of not only China but also the world."

Her comments came in response to a US Treasury report on Wednesday that said China didn't manipulate the exchange rate for export advantage, but it still claimed the yuan remains undervalued.

The report said China has taken steps to enhance exchange rate flexibility and reaffirmed the need to allow the exchange rate to adapt to an equilibrium level.


The renminbi has appreciated by 20 percent between June 2005 and February 2009. And the currency even appreciated slightly against the dollar when most other emerging markets and other currencies fell sharply against the dollar.

Dong Xian'an, chief economist with China Southwest Securities, said the US Treasury's remarks helped avoid a possible clash at a time when international cooperation is critical for pulling the world economy out of recession.

"Both nations will opt for cooperation, which is critical for global economic recovery," Dong said.

As the biggest foreign creditor of the US government, China further increased its purchases of American securities in February. Its holdings of Treasuries rose 0.6 percent to $744.2 billion, according to the latest International Capital Report by the US Treasury Department.

"China's investment and management of foreign reserves will follow the principles of safety, liquidity, value-increment and diversity," Jiang said.

It is estimated that 70 percent of China's $1.95 trillion in foreign exchange reserves is invested in US dollar-denominated assets.

"Currently, US Treasury bills, notes and bonds are considered comparatively safe and the most liquid," said Zhao Xijun, a finance professor from Renmin University of China.

Source: China Daily
http://www.chinadaily.com.cn/bizchina/2009-04/17/content_7686541.htm
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China Business 0 Comment April 17, 2009, 10:58 am

FDI in China declines 20.6% in Q1

Foreign direct investment (FDI) in China posted a 20.6 percent year-on-year decline in the first quarter to $21.78 billion, the Ministry of Commerce announced Wednesday.

In March, FDI was $8.4 billion, the biggest amount since October 2008 which was $8.35 billion. However, the March figure was down 9.5 percent from a year earlier, ministry spokesman Yao Jian said at a news conference.

March was the sixth consecutive month that FDI fell. The good news is that the decline eased from the 15.81 percent drop in February and a 32.67 percent drop in January.

Zhang Hanya, an economist with the National Development and Reform Commission said a reduced decline indicated overseas investors growing confidence in the country's economic recovery.

Chinese Premier Wen Jiabao said Saturday that the Chinese economy showed signs of positive improvement in the first quarter as a result of the economic stimulus package adopted by China.

Yao added stable investment inflows were important for the country to stabilize exports, enhance employment and boost consumption as the government tries to make China more attractive to investors.

The ministry said in March it was shifting authority for approving certain foreign investments to provincial governments.

Original Source: Xin Hua News
Source: China Daily
http://www.chinadaily.com.cn/bizchina/2009-04/15/content_7679676.htm
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China Business 0 Comment April 16, 2009, 9:02 am

Central bank to sell $10b of 3-month bills

China's central bank announced Wednesday a sale of 70 billion yuan (about $10 billion) of three-month bills in Beijing on Thursday.

The move was aimed at maintaining a steady growth in the country's monetary base and keeping interest rates stable, said the People's Bank of China in a statement.

Since the beginning of 2009, the central bank has increased the frequency of its three-month bill sales. In February, it sold three-month bills once every week. Thursday's sale will be the biggest one since May 2008.

A Guosen Securities report said the amount of liquidity in the market is abundant and commercial banks need more channels for short-term investment. Three-month bill sales helped broaden the channels.

Analysts said the central bank might continue to drain funds from the market as new yuan-denominated loans reached about 2.5 trillion yuan in the first two months, but it will leave it on track to conduct a small net injection into the market in March as several previous sales will be due this month.

Source: LawInfoChina
http://www.lawinfochina.com/News/News_Detail.asp?Id=7229
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China Business 0 Comment April 10, 2009, 8:38 am

5 bln yuan local bonds of Henan Province set for sale next week

A total of 5 billion yuan (731.5 million U.S. dollars) of the local government bonds of the Henan Province are scheduled for sale on April 7, said the Chinese Ministry of Finance (MOF) on Friday.

The batch of bonds, which is the third of its kinds in China, will be issued by the MOF on behalf of the Henan provincial government and take the form of book-entry national treasury bonds.

The ministry said the three-year bonds will be sold to investors between April 7 and April 9, and will become tradable as of April 13 on the inter-bank market and securities exchanges.

The bonds have a fixed coupon of 1.63 percent, higher than that of the previous two batches of bonds, with interest to be paid annually.

China planned to float 200 billion yuan of local government bonds this year, with the first batch of Xinjiang Uygur Autonomous Region government and the second of Anhui Province issued on March30 and April 1, respectively.

The ministry said most of the 200-billion-yuan local government bonds would be issued during the second and third quarters this year.

According to the ministry, Sichuan Province will be the next to have its local bonds issued, with the public bidding starting on April 7.

Source: Xinhua
http://news.xinhuanet.com/english/2009-04/03/content_11127880.htm
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China Business 0 Comment April 9, 2009, 10:08 am

G20 leaders open summit in London to tackle financial crisis

LONDON - Leaders from the Group of 20 (G20) industrialized and emerging economies kicked off their one-day discussion in London on Thursday and are expected to issue a joint communique for a global solution to the financial and economic crisis.

Britain's Prime Minister Gordon Brown (L) greets US President Barack Obama as he arrives for the G20 summit at the ExCel centre, in east London April 2, 2009. [Agencies]

The summit started by a breakfast scheduled at 8:30 am local time after the leaders were greeted by British Prime Minister Gordon Brown at the entrance of London's exhibition center, or ExCel London, in eastern London.

Security is tight around the venue. Police can be seen at every crossroads within about five kilometers. Journalists have to pass through two security checkpoints to get to the press center, where about 2200 registered journalists work and many of them stayed for the night.

Outside the Excel, anti-capitalist protesters started their second day of protests. On Wednesday, at least 87 were arrested and one protester died, London's police said.

Brown, the host, who made a global trip and met the leaders to prepare for the summit, said he was confident that the summit will produce consensus on a global plan for economic recovery and reform. "We are within a few hours, I think, of agreeing a global plan for economic recovery and reform and I think the significance of this is that we are looking at every aspect," Brown said on the eve of the summit.

The leaders are expected to have a busy day of intensive talks. A joint communique will be issued at the end of the summit. Expectations are high that the leaders of the world's largest economies would be committed to a coordinated response to the economic crisis, an overhaul of the global financial architecture and restraint from protectionism.

Attending the meeting are leaders from Australia, Brazil, Britain, Canada, China, France, Germany, Indonesia, Italy, Japan, the Netherlands, Russia, Saudi Arabia, Spain, South Africa, South Korea, Russia, Turkey, the United States and the European Union (EU).

Source: China Daily
http://www.chinadaily.com.cn/china/g20/2009-04/02/content_7644159.htm...

China Business 0 Comment April 7, 2009, 9:21 am

¡°Bureaucrats will always find a way to frustrate you¡±

On 17 October, 2008, the Shenzhen Administration for Industry and Commerce (¡°AIC¡±) issued a notice, stating that ¡°[i]n accordance with the Decree of Government Information Openness and relevant regulations of Shenzhen government information openness, all basic information of entities registered with Shenzhen AIC is open to the public. The public can look up the information from the AIC official website. AIC also has set up a serach system in the AIC Registration Hall and all the entities information such as capitals, shareholders, modifications and etc. are free to the public.¡±

According to the previous rule, access to company files should cost no less than RMB50 yuan. The charge was approved by the Price Bureau and was completely legal. Some considered that it was unreasonable that AIC charged money for information that was supposed to be open. The charge could be described as ¡°a legal robbery¡±. The new notice removed the charge which was sure to be popular.

However, this morning, when I went to Futian District AIC to search full set of company files, he was informed that he should go to the Municipal AIC to obtain the files. According to our experience, the company files s District AIC if the company was registered with the District AIC. Since being rejected, I went to the Municipal AIC accordingly.

When I arrived at the Municipal AIC, I was told that I should have applied first, and in 15 days AIC would notice us whether I would be approved to look up or not. What¡¯s more, I should have been agreed by the company that I intended to look up. That is to say, when I paid for the charge, it would take me about 1 hour to look up the company information; when it¡¯s free, how much time am I supposed to spend? Obviously, when AIC provides the free service, it also sets up complicated procedures and ineffectiveness. Although we don¡¯t have to pay RMB50 yuan, we have to spend more time and more cost.

In Chinese government circles there¡¯s a saying ¡°there's always countermeasure to a policy¡± to describe the local government issuing local rules to counter the central government policies. It seems that Shenzhen AIC also followed the rule and the real intention, which is to provide citizens with conveniences, would be settled for a lot less.

At last, I would like to say: ¡°How I miss the times when I was robbed legally!¡±
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China Business 0 Comment April 3, 2009, 9:05 am

Long-term real estate plan due after Oct 1

China's central government has worked out a long-term real estate development plan and will make it public after Oct 1, according to Qi Ji, vice minister of housing and urban-rural development.

Qi made the remarks on Friday while attending the proposal discussion at the annual session of the Chinese People's Political Consultative Conference (CPPCC).

"The plan, covering from the development to consumption stage, is partly aimed to address the job problems of migrant workers," Qi was quoted by Beijing Business Today as saying.

The construction sector usually employs around 30 million migrant workers.

"To maintain the situation, we have to do something to ensure the property investment and development," Qi added.

Source: China Daily
http://www.chinadaily.com.cn/bizchina/2009npc/2009-03/09/content_7554850.htm
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China Business 0 Comment April 2, 2009, 10:58 am

Britain welcomes Chinese acquisitions, says official

The British Government will welcome Chinese companies that plan to invest in the United Kingdom through acquisitions, a senior government official said in Beijing on Wednesday.

"We have always been open to foreign investment by acquisitions. In this financial difficulty, some British companies will welcome foreign investment to strengthen their capital base," said Alastair Morgan, the UK's director of trade and investment in China.

Morgan made the remarks when commenting on a second Chinese business delegation that left for four European countries last weekend for investment and acquisition opportunities in sectors like automobiles, machinery, textile, food, electronics and technologies related to energy saving and environmental protection.

The delegation, close on the heels of a Chinese trade team that signed $13 billion purchasing deals in late February, is also visiting destinations like Germany, Switzerland, Spain and Britain.

"But Chinese companies need to be careful. If they do not have much exposure to overseas marketing management, it may not be easy to run the large overseas businesses they acquire," Morgan told China Daily.

The UK Trade & Investment (UKTI) on Wednesday launched the UK Advanced Engineering Global Marketing Strategy in Beijing. The program aims to boost Sino-UK commercial collaboration in the area of advanced engineering and highlight the UK's research and development strength. The program, which will run for five years, was simultaneously launched in Beijing, London and Birmingham.

The UKTI will carry out a series of activities in 2009 and 2010 to increase constructive dialogue between Chinese and UK businesses on advanced engineering issues.

Advanced engineering encompasses sectors including aerospace, automotive and advanced materials.

Source: China Daily
http://www.chinadaily.com.cn/bizchina/2009-03/12/content_7573182.htm
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China Business 0 Comment March 20, 2009, 9:39 am

Britain welcomes Chinese acquisitions, says official

The British Government will welcome Chinese companies that plan to invest in the United Kingdom through acquisitions, a senior government official said in Beijing on Wednesday.

"We have always been open to foreign investment by acquisitions. In this financial difficulty, some British companies will welcome foreign investment to strengthen their capital base," said Alastair Morgan, the UK's director of trade and investment in China.

Morgan made the remarks when commenting on a second Chinese business delegation that left for four European countries last weekend for investment and acquisition opportunities in sectors like automobiles, machinery, textile, food, electronics and technologies related to energy saving and environmental protection.

The delegation, close on the heels of a Chinese trade team that signed $13 billion purchasing deals in late February, is also visiting destinations like Germany, Switzerland, Spain and Britain.

"But Chinese companies need to be careful. If they do not have much exposure to overseas marketing management, it may not be easy to run the large overseas businesses they acquire," Morgan told China Daily.

The UK Trade & Investment (UKTI) on Wednesday launched the UK Advanced Engineering Global Marketing Strategy in Beijing. The program aims to boost Sino-UK commercial collaboration in the area of advanced engineering and highlight the UK's research and development strength. The program, which will run for five years, was simultaneously launched in Beijing, London and Birmingham.

The UKTI will carry out a series of activities in 2009 and 2010 to increase constructive dialogue between Chinese and UK businesses on advanced engineering issues.

Advanced engineering encompasses sectors including aerospace, automotive and advanced materials.

Source: China Daily
http://www.chinadaily.com.cn/bizchina/2009-03/12/content_7573182.htm
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China Business 0 Comment March 20, 2009, 9:39 am

China rejects Coke bid to buy major juice maker

BEIJING -- China has rejected Coca-Cola Co.'s $2.3 billion bid to buy a major Chinese juice producer, the Ministry of Commerce (MOC) announced Wednesday.

The purchase of China Huiyuan Juice Group, the nation's largest juice maker, would have been the biggest foreign acquisition of a Chinese company to date.

The proposed purchase was rejected on anti-monopoly grounds, MOC said on its website. "The bid may harm competition...in China's beverage market."

The ruling is the first of its kind since China promulgated its anti-monopoly law last August.

Shares of the Hong Kong-listed Huiyuan were suspended from trade after plunging 20 percent amid speculation Coca-Cola may abandon its bid for the company.

The juice maker's stock last traded 19.4 percent lower at HK$8.3 before being halted early in the session. Coca-Cola Co. was expected to abandon the deal as doubts rose that Chinese regulators would want the beverage giant to relinquish the Huiyuan name, a well-known brand throughout China.

The deal itself is set to expire around March 23 unless granted approval, according to terms set by the two companies. However, they could agree to extend or renew the deal.

Coca-Cola offered on September 3 to buy Huiyuan for HK$17.92 billion (US$2.3 billion) in cash. Rival juice producers have since warned that the acquisition would give Coca-Cola too dominant a position in China's beverage market.

In late September Coca-Cola filed with the MOC for anti-trust approval. According to the anti-monopoly law, mergers or acquisitions must go through an anti-monopoly review if the deal involves a company with a revenue of over 400 million yuan in China or all companies involved have a combined revenue of 10 billion yuan worldwide.

Huiyuan's founders and major shareholders already had endorsed the sale.

Source: China Daily
http://www.chinadaily.com.cn/china/2009-03/18/content_7592156.htm...

China Business 0 Comment March 19, 2009, 2:54 pm

Chinese firms will increase overseas M&A

Chinese companies will increase overseas mergers and acquisitions in the next 12 months as the economic downturn presents opportunities, according to a survey from Royal Bank of Scotland (RBS).

The survey of 106 respondents from China showed 63 percent expected the level of Chinese outbound M&A to increase, with businesses in Asia, North America and Europe identified as the targets.

"Chinese corporations remain eager to expand through global acquisitions. This is part of a continuation of a longer-term trend and for which the current difficult global economic environment presents opportunities," said Michael Bracken, managing director with corporate finance group Asia at RBS.

In terms of deal size, 63 percent of respondents said the bulk of acquisitions would occur within the "mid-market" range, less than $500 million.

Source: China Daily
http://www.chinadaily.com.cn/bizchina/2009-03/05/content_7540991.htm
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China Business 0 Comment March 11, 2009, 11:25 am

Chinese firms seek to invest in Europe

A high-level Chinese business delegation is set to travel to Europe this weekend to explore investment avenues - close on the heels of a trade team which returned to Beijing last weekend.

Officials in the Ministry of Commerce (MOC) said the team will be mainly looking at investment and merger and acquisition (M&A) opportunities in the first mission of its kind to Western Europe.

The most likely targets are companies competitive in manufacturing, clean energy and environmental protection, Beijing-based trade specialists said. Given the market volatility, financial service companies are unlikely to be on the shopping list, they said.

"We will be exploring opportunities for financial participation in European companies," said Commerce Minister Chen Deming, who headed the first trade mission to Europe but, according to MOC sources, is unlikely to lead the second.

Chen made the remarks on Monday after wrapping up his week-long trip to Europe, mainly to import high technologies and advanced equipment.

That trip covered four European countries - Switzerland, Germany, the United Kingdom, and Spain - and resulted in a slew of Chinese orders worth more than $13 billion.

MOC officials would not reveal any specific figure or targets of interest for investment, saying only that in all likelihood, it would take a longer time to allow Chinese businesses to examine a range of options.

Observers said that while the first trade delegation reflects China's rising domestic demand and its determination to keep its markets open amid rising protectionism, the second will show its interest in working with Europe on investment and corporate management.

China's growing M&A appetite, according to Li Jian, a researcher with the Chinese Academy of International Trade and Economic Cooperation, makes sound business sense.

"The global economic crisis allows Chinese companies, with their ample cash reserves, strategic cross-border partnerships with cash-strapped international companies," Li said.

According to a report released yesterday by UK-based The Mergermarket Group, an M&A intelligence service provider, Chinese outbound M&A activities are set to increase this year.

The report said 2009 would be "one of the best years" for buyers in the global M&A arena. Asset prices have declined due to the deepening economic crisis; and in many cases, owners are being forced to sell assets to pay down debts as bank and market financing dry up.

The two primary motivations for Chinese companies considering foreign acquisitions are to expand overseas market share and to acquire technology know-how, according to a survey included in the report.

China is currently looking for productive ways to use its nearly $2 trillion in foreign-exchange reserves to support companies in their overseas development, Fang Shangpu, deputy director of the State Administration of Foreign Exchange, recently said.

In the largest ever overseas investment by a Chinese company, the country's biggest aluminum producer Aluminum Corp of China (Chinalco) will inject $19.5 billion into Rio Tinto Ltd, the London-based miner announced on Feb 12. This will increase Chinalco's stake in the miner to 18 percent, from the 9 percent it held earlier.

However, some analysts also warned of the potential risks in overseas M&A activities. "Chinese firms must be careful with those assets on sale and avoid bringing home 'new burdens'," said Feng Lei, a researcher with the Chinese Academy of Social Sciences.

Source: China Daily
http://www.chinadaily.com.cn/china/2009-03/04/content_7532458.htm
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China Business 0 Comment March 9, 2009, 8:30 am

LOOTED CHINESE RELICS SOLD FOR 14 MILLION EUROS EACH

PARIS, Feb. 25 (Xinhua) -- Two controversial ancient Chinese relics were auctioned off on Wednesday night for 14 million euros (17.92 million U.S. dollars) each by anonymous telephone bidders in Christie's sale of the collection of Yves Saint Laurent and Pierre Berge in the Grand Palace of Paris.

According to Christie's, they have received 8 phone calls for "enquiries" before the sale. After the auction was launched, the competition was only conducted between telephone bidders, with no one in the scene raised for a bid.

Christie's refused to disclose who were the bidders at a press conference afterward.

The bronze sculptures, a rat's head and a rabbit's head, were looted by invading Anglo-French expedition army in the 19th century, when the invaders burned down the royal garden of Yuanmingyuan in Beijing.

Li Huan, a Chinese student in France told Xinhua that the two bronzes are news for the French, but history for the Chinese. Earlier this night, some Chinese students in France voluntarily went to the Grand Palace, distributing sheets introducing the history of Yuanmingyuan and the Second Opium War in 1860.

"They should know more about the history. Although we failed in the lawsuit, justice will not fail," said Li.

The Tribunal de Grande Instance in Paris ruled against stopping the sale of the two bronzes on Monday, and the Association for the protection of Chinese Art in Europe (APACE) was ordered to pay compensation to the defendant.

Ren Xiaohong, a lawyer for APACE, told Xinhua that it was "of great significance" to file the lawsuit. "We hope to arouse public attention in Europe on the fate of numerous Chinese works stolen in the past, to help keep those relics well protected and collected," Ren said.

"My heart sank when the court refused our appeal," said Bernard Gomez, president of APACE, adding that "I hope the bidders are Chinese, I hope the two relics could go home eventually."

Bernard Brizay, French historian and journalist, as well as the author of "1860: the Looting of the Summer Palace" told Xinhua after the two bronzes were sold that he could understand the Chinese feelings towards the two relics. He said, "the two bronzes should be returned to China, no matter who got the bids."

Brizay also scorned on the offer by Pierre Berge, Yves Saint Laurent's partner. He used five "stupid" on Berge's words. "Combining the two relics with human rights and Tibet issues has no difference with blackmailing for ransom," he said.

The Chinese government formally called on Tuesday for the cancellation of the auction of the two bronzes. "The State Administration of Cultural Heritage has formally informed the auctioneer of our strong opposition to the auction, and clearly demanded its cancellation," said Ma Chaoxu, Chinese Foreign Ministry spokesman in a press conference.

"Using the pretext of human rights to infringe on the Chinese people's fundamental cultural rights is just ridiculous," Ma said.

The two bronze sculptures are part of the art collection of the late fashion designer Yves Saint Laurent. So far, five of the 12 bronze animal fountainheads have been returned to China, while the whereabouts of five others are unknown.

Source: Xinhua
www.chinaview.cn
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China Business 0 Comment March 3, 2009, 11:37 am

TRADE TEAM HEADS TO EU FOR BIG DEALS

By Diao Ying (China Daily)

A high-level business delegation heads to Europe today to sign deals potentially worth billions of dollars on a "wide range of buying interests".

Some media reports put the price tag at 15 billion yuan ($2.2 billion) while others believe that the figure could be considerably higher - but Ministry of Commerce (MOC) officials said there was no way to arrive at an amount before the contracts were actually signed.

The business delegation led by Minister of Commerce Chen Deming is seen as being on a mission to strengthen China-Europe trade ties prior to President Hu Jintao's trip to the G20 Summit, to be held in London in April.

Premier Wen Jiabao, who visited four European countries in early February, was the first senior Chinese official to announce plans for the so-called "procurement teams" during his trip.

The commerce minister's trip is scheduled to cover Switzerland, Germany, the United Kingdom, and Spain, the four countries on Wen's itinerary.

Observers also say the commerce minister's mission would showcase China's strong domestic demand as well as its determination to fight trade protectionism.

"Chen can take a positive message to the world: China, as a major trading power, has no interest in adopting protectionism," said Song Hong, an international trade researcher with the Chinese Academy of Social Sciences.

According to MOC officials, the trade delegates are from Chinese industry associations and companies associated with vehicles and vehicle parts, machinery and electrical products, and environmental protection technologies.

MOC spokesman Yao Jian has said China's rising demand for European goods stems from the 4-trillion yuan ($586 billion) economic stimulus plan that Beijing rolled out in November 2008.

The plan includes huge infrastructure projects, so "Europe has an obvious edge in providing us with the equipment we need," he said.

Zhang Yansheng, a research official with the National Development and Reform Commission, China's top economic planning office, said sending procurement missions to the EU can create a win-win situation.

"Chinese buyers would love to have government insurance on price, quality and delivery time while European sellers can see a good business opportunity," he said.

The initiative is also intended to create a balance in trade, officials said.

China is a key market for the EU and is the 25-nation bloc's fastest growing export destination. Bilateral trade increased 19 percent year-on-year to $425.6 billion in 2008, with China having a trade surplus of $160 billion.

Source: China Daily

Posted by JL...

China Business 0 Comment February 25, 2009, 2:00 pm

STATE-BACKED FIRMS TOLD TO SLOW BUYING SPREES

Kandy Wong and Martin Zhou in Beijing
Feb 23, 2009

Even as the mainland's state-backed commodity companies have been on an overseas acquisition spree, manufacturing firms have been advised by the central government to slow down foreign mergers and acquisitions, as it believes global asset prices will continue to slide and better terms can be had for offshore acquisitions by waiting.
China Minmetals Corp and Aluminum Corp of China (SEHK: 2600) are awaiting approval from the Australian government for a combined investment of US$21.2 billion in debt-laden OZ Minerals and Rio Tinto Group, while iron ore exporter Fortescue Metals Group is reported to have held investment talks with China Investment Corp and Hunan Valin Iron and Steel Group.

These acquisitions have sparked hopes that mainland companies would buy more overseas industrial and commodity assets.

Many investment banks are actively pitching acquisition opportunities in China as the country has the financial strength to bid for assets of cash-starved global corporations struggling to finance their operations and reduce debt amid the financial crisis.

"The State-owned Assets Supervision and Administration Commission hopes the manufacturing sector, excluding the commodity industry, will adopt a wait-and-see attitude to purchasing global assets," a source close to the commission quoted its chief, Li Rongrong, as saying in a recent internal meeting.

"Investment banks would like to target the vehicle, resources, and banking industries. But the central government will not approve the completion of overseas acquisitions by local carmakers and banks for some time," said a source.

"Beijing may issue approval only if the buyers can provide convincing reasons, such as the strategic importance of securing the deals," the source added.

Unlike the vehicle and finance sectors, mainland commodity companies have won approval to proceed with aggressive offshore expansion plans as prices in the resources sectors plunged.

"Relatively speaking it's easier for commodity companies to justify their acquisitions from a strategic point of view," the source said.

In contrast, China's largest carmaker, SAIC Motor Corp, has suffered considerable losses on a US$500 million controlling investment made in South Korean sports-utility vehicle subsidiary Ssangyong Motor, which secured bankruptcy protection last month only after winning government support to turn the company around.

Shanghai-based SAIC took the lead in 2004 in acquiring global vehicle assets as Beijing encouraged big corporations to "reach out" and learn technological skills from international carmakers.

"But now the government worries about buying into worthless or depreciating assets," the source said.

In addition to SAIC's offshore investment problems, China Investment Corp's US$5 billion stake in Morgan Stanley and a US$3 billion stake in Blackstone Group have shrunk by more than 60 per cent since 2007. Ping An Insurance (Group) (SEHK: 2318) booked a loss of 15.7 billion yuan (HK$17.8 billion) last year on a 5 per cent stake it bought in Dutch-Belgian financial group Fortis for 23.9 billion yuan.

Numerous reports said earlier that some carmakers, such as Guangzhou Automotive Industry Corp, Hong Kong-listed Geely Automobile Holdings (SEHK: 0175) and Dongfeng Motor (SEHK: 0489), as well as Shenzhen-listed Chongqing Changan Automobile, had held preliminary talks with Ford Motor of the United States on the acquisition of its Volvo passenger car unit for US$6 billion. However, the mainland carmakers denied any possible acquisitions by saying that the domestic market and internal business of the companies should top the list.

"The Chinese carmakers can't complete global acquisition deals by themselves as they don't have enough net cash," the source said.

Sichuan Automobile, a maker of small cars, also denied it had met General Motors for talks about buying its Hummer sports-utility vehicle brand. "Obviously, car giants in the US have an imminent need to sell their assets to generate cash," the source said.

Source: South China Morning Post
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China Business 0 Comment February 24, 2009, 12:17 pm

LEHMAN, LEE AND XU AGAIN AUTHOR TRADEMARK GUIDE FOR OXFORD UNIVERSITY PRESS

With an update covering Macau, attorneys from the Beijing-headquartered law firm Lehman, Lee and Xu have again co-authored an Oxford University Press guide to registering and protecting trademarks in China.

The recently released 34-page Macau segment is part of the two-volume Oxford Press ¡°Trademark Practice & Forms¡± publication that covers 60 jurisdictions worldwide, with an emphasis on how to register marks, maintain registration and enforce registered rights.

The guide also provides a detailed explanation of laws and regulations on trademark registration requirements and procedures, oppositions, extensions, renewals and reinstatements. Along with the Mainland and Hong Kong guides, the Macao segment is now amended with the very latest information.

After Macao became Special Administrative Region in 1999 and subsequently joined the World Trade Organization, it adopted international standard property rights regulations that provide strong protection. With the end of the state gambling monopoly, multinational gaming companies opened some of the largest casinos in the world in Macao and trademark applications have since increased four-fold from 1,705 in 2002 to 7,200 in 2007.

For further information, contact: elehman@lehmanlaw.com at Lehman, Lee and Xu. To order for the guide from Oxford University Press, visit www.oup.com.
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China Business 0 Comment February 17, 2009, 2:26 pm

CHINA REVISES PATENT LAW TO ENCOURAGE INNOVATION

BEIJING, Dec. 27, 2008 (Xinhua) -- China's top legislature on Saturday approved the revision of the Patent Law to allow inventors to apply for foreign patents before domestic ones for their inventions.

The revised law, which takes effect on Oct. 1, 2009, was adopted with 154 votes and four abstentions at the closing meeting of the sixth session of the 11th National People's Congress (NPC) Standing Committee.

The change is aimed at encouraging innovation and improving China's "international competitiveness", Chen Guangjun, a senior official with the NPC's Education, Science, Culture and Health Committee, said at a press conference after the legislative session.

Previously, the Patent Law stipulated that people, whose inventions were completed in China, must apply for domestic patents first before applying for a foreign one.

The new amendment also says Chinese inventors must first go through government scrutiny before applying for foreign patents to find out if such innovations should be made national secrets.

Inventions which have not undergone security checks will not be granted Chinese patents, according to the law.

The amendment applies to all inventions completed in China.

The Patent Law, which was enacted 1985, has had two major revisions in the past.

Source: http://news.xinhuanet.com
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China Business 0 Comment January 5, 2009, 4:31 pm

CHINA SEEKS FOREIGN AID TO PURSUE OVERSEAS INVESTORS WHO FLEE

(Xinhua)

China is seeking foreign help to pursue overseas investors who flee the country without properly liquidating their assets.

China's ministries of commerce, foreign affairs, justice and public security jointly issued on Friday a guideline for cross-border investigation and litigation of fugitive foreign investors.

The country would follow both international rules and domestic regulations to address such cases and seek assistance from foreign countries, the ministries said.

China would also request extradition or case transfer when a "huge amount of money" was involved, it said.

There are increasing cases in China of foreign investors who do not go through the formalities of declaring bankruptcy, but instead slip away, leaving behind equipment, unpaid wages and debts. Most of those fleeing investors were in small and labor-intensive companies.

Most foreign-funded companies in China are supported by domestic companies, and any capital withdrawal by the foreign-funded companies would affect the domestic ones, industry experts said.

According to previous media reports, 87 companies funded by investors from the Republic of Korea (ROK), withdrew from Shandong Province without proper liquidation of assets last year. The figure was 21 in 2003.

In January, more than 10 ROK company officials suddenly abandoned their Yantai Shigang Fiber Co in Shandong and fled because of financial difficulties. They left without paying the wages of more than 3,000 employees and large debts.

Source: China Daily, December 20, 2008
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China Business 0 Comment December 30, 2008, 10:28 am

CHINA DEVELOPMENT GOES COMMERCIAL

According to a notice published on its Chinese website, the China Development Bank Corporation (DBC) was set up on Dec 16 to become the first Chinese policy bank to change into a commercial bank, marking an important step forward for Chinese policy banks.

The new joint-stock entity DBC in whole inherited assets, debts, business, institutions and employees amounting to a registered capital of RMB 300 billion. China's Ministry of Finance became the Majority shareholder with an investment of RMB 153.908 billion while Central Huijin, an investment arm of the government, invested the rest at RMB 146.092 billion. All of the institutions, brands, domain names on the internet, and telephone numbers of consulting service will not change from those of the former China Develop Bank.

The reform of Chinese policy banks began in the beginning of 2006. This was shortly after a report in the November 2005 edition of Report Finance Stability revealed changing ideas about China¡¯s banking sector. A statement from China¡¯s central bank pointed out that the business environment of policy banks had changed and accordingly, the function of policy banks must be reappraised.

In 1992, the former Chinese leader Deng Xiaoping raised the point that China should develop its commercial banks into real commercial bank. This led to the Big-four state-owned banks to separate their policy business, which led to the establishment of China¡¯s three policy banks.

The former China Development Bank was engaged in lending to support the development of Chinese basic infrastructure and large industrial projects. While China Development Bank has made a great contribution to China¡¯s development, the economic environment has changed. Many industries that once needed financial support from policy banks have become competing industries.

Another reason for the reform is to distance themselves from a industry known for poor management, allowing DBC to become more competitive.

The establishment of DBC is a significant advance in policy bank reform as well as an important part of China¡¯s financial reform.

By Weiwei Ye...

China Business 0 Comment December 25, 2008, 9:53 am

LEHMAN LEE & XU RISES FROM THE DUST OF THE RECENT FINANCIAL STORM

At first, the name Lehman conjures up thoughts of financial ruin and business collapse but LEHMAN, LEE & XU, of no relation to the now-bankrupt Lehman Brothers, is at the top of its game and looking to expand its business while other international firms are shrinking. With its head office in Beijing, China, LEHMAN, LEE & XU has seen the rise and fall of international law firms attempting to penetrate the Chinese market. In the past few years many large firms from all over the world have opened offices in Beijing and throughout the rest of China and have sent many of their best legal talent to navigate China¡¯s sometimes treacherous legal waters. Recently, some of these firms such as DLA Piper have been forced to downsize their Chinese offices, sending many of their expatriate employees to return to their home countries. Some firms have even required payment from long-time partners in order to give them some measure of job insurance for the future.

However, because of its long-standing presence and experience working in China and its prominent, loyal client base, LEHMAN, LEE & XU is experiencing impressive growth, even during this time of down-sizing and demotions. With their newly established "financial crisis task force", their legal services are more in demand than ever and they have seen their clientele grow and prosper. As a result, LEHMAN, LEE & XU is currently looking to hire 100 lawyers to meet the increasing demand for the firm¡¯s unparalleled legal expertise. While businesses in every industry are being forced to trim down before the winter, Lehman, Lee & Xu is building muscle in order to keep its clients safe, warm and protected in the midst of this financial storm.

Source: LEHMAN, LEE & XU Press Room
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China Business 0 Comment December 23, 2008, 9:04 am

CHINA LETS COMMERCIAL BANKS LEND FOR M&A

China¡¯s banking regulatory organization, the China Banking Regulatory Commission, issued Guidelines on the Supervision of Commercial Bank Loans for Mergers and Acquisitions, allowing commercial banks to provide loans for mergers and acquisitions to support enterprises as of Dec.9, 2008.

The guidelines are aimed at encouraging bank lending for M&A and helping local companies expand fund-raising channels. According to the guidelines, commercial banks, including foreign banks, may provide loans for companies to support M&A.

Risk control is still emphasized heavily in the guidelines. For example, the guidelines require that commercial banks involved in M&A lending that concerns cross-border transactions must also evaluate country risk, foreign-exchange risk and transit-of-capital risk.

The guidelines also say that M&A loans cannot exceed half of a bank¡¯s core net capital during the life of the loans, and loans to any single borrower cannot exceed 5% of the bank¡¯s core net capital during the life of the loans.

Allowing bank loans for M&A will benefit listed companies and private equity enterprises, which is also a strong measure in combating the negative influence of the financial crisis.

By Weiwei Ye
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China Business 0 Comment December 17, 2008, 5:00 pm

HOPE FOR THE BEST

China¡¯s annual Central Economic Work Conference, to be held from Monday to Wednesday in Beijing, will set the tone for next year's economic policy. The three-day event is expected to shed more light on how the government will use fiscal and monetary measures to bolster employment and domestic demand, while reducing excessive dependence on exports.

Over the past months, like many other countries or regions throughout the world, China was heavily affected by the world financial storm. Consequently, a number of factories in the costal export bases have closed down, leading to the layoffs of hundreds of thousands of migrant workers. University graduates are also finding it hard to get jobs.

The bleak situation has led the government to unveil a host of measures such as a $586-billion stimulus package and hefty cuts in interest rates to jack up domestic demand.

It is said that the meeting will detail measures for achieving at least 8 percent growth in 2009, the minimum required to keep the unemployment situation under control.

We do not know yet what effect this meeting will bring about to China¡¯s economy and China¡¯s employment issues. Meantime, all we can do is to keep our fingers crossed and hope for the best for China as well as to the whole world.

By JL...

China Business 0 Comment December 9, 2008, 9:50 am

PROMULGATION OF PROVISIONS FOR TRIAL IMPLEMENTATION ON THE COMPLIANCE MANAGEMENT OF SECURITIES COMPANIES

China Securities Regulatory Commission promulgated Provisions for Trial Implementation on the Compliance Management of Securities Companies (Compliance Management Provisions). The Compliance Management Provisions, which shall be implemented on August 1, 2008, provided that securities companies shall set up the basic compliance management system.

The Compliance Management Provisions stipulates that the board of directors, the board of supervisors and the senior management of the company shall, according the provisions of law, administrative regulations or the bylaw of the company, perform their obligations related to the compliance of management and shall be responsible for the validity of the compliance of their departments or branches. The employees of securities companies shall also be responsible for the compliance of their performance.

What matters most is that the Compliance Management Provisions stipulates that securities companies shall have a Chief Compliance Officer (CCO). A COO is the senior manager of the securities companies who is responsible for compliance work. COO shall inquire, supervise and investigate the business operation of the securities companies and the performance of the employees of the company. COO shall inquire and supervise the internal management system of the company, the important decisions, the new products and the new operation plans. If there is anything illegal with the securities company or any potential risk existing with company compliance, the COO shall initiatively report to the relatively departments of the company as well as to Securities Regulatory Bureau.

To promote the establishment of compliance management system, the Compliance Management Provisions also stipulates that securities companies shall have the performance inspection and drive mechanism system. The COO shall be included into the senior management of the company and their performance shall be assessed, and their remuneration shall be grounded on the outcome of the assessment.

Wei Wei Ye from Lehman, Lee & Xu¡¯s Beijing office thinks that the new Compliance Management Provisions are not only good for securities companies to establish compliance management system, but also good for the development of the securities industry. She also stated that the ¡°new provision will promote a healthy and regular securities environment¡±.
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China Business 0 Comment July 18, 2008, 5:02 pm

Olympic ambush marketing

Looks like the Beijing Organizing Committee for the Olympic Games' (BOCOG) declaration that they would be fining ambush marketers during the Olympics might actually have some teeth to it, at least enough to scare companies into canceling their ambush marketing deals - the Wall Street Journal reported last week that Chinese sportswear maker Li Ning has canceled its deal to clothe CCTV broadcasters during the Olympic broadcast:

The company, which isn't an official sponsor of the Beijing Games, suspended a coveted deal under which it had furnished clothes and shoes worn by sportscasters on China's giant state-run sports channel.

...

[T]he demise of a deal between two such well-connected entities sends a warning that the Chinese government is serious about enforcing sponsorship deals.


A lot of the damage has already been done in terms of Chinese consumers' perception of brands associated with the Olympics. Undoubtedly, the BOCOG was well aware of the issue of ambush marketing far in advance of the games, but they chose to make a statement regarding ambush marketing only two months before the games. Even though Li Ning, a brand that is virtually un-known outside of China, won't be able to make impressions on viewers during the game, they've already made a tremendous showing in their biggest market.

The government appears to be planning a good faith effort during the games themselves. However, considering that the poll reported in WSJ shows four of the ten brands most associated with the Olympics are non-official sponsors, it's not so obvious that the government was serious about enforcing sponsorship deals. As is often the case in China, government inaction or delay may have been tantamount to action in itself, granting increased awareness of Li Ning's brand well before the Olympic events.

--

Background:

Athletic-Wear Firm's Olympic Dream Fades (Wall Street Journal)
Rule Bans Ambush Marketing (China Daily)
Beijing Regulations on Ambush Advertising During the Olympic Games (Lehman, Lee & Xu's China Law Digest)

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China Business 0 Comment July 3, 2008, 10:12 am

3G Licenses to be issued after telecom restructuring

The Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Finance stated that it will issue 3G licenses after industry restructuring is completed. Regulatory agencies have encouraged fixed-line operator China Netcom to merge with China Unicom and for China Telecom to purchase China Unicom's code-division multiple access (CDMA) network.

According to China Daily's analysis,

China Mobile will be granted a 3G license based on the country's home-made technology TD-SCDMA, while China Telecom and China Netcom will get theirs based on the WCDMA and CDMA2000 standard respectively.

The 3G licensing will also unleash huge demand for infrastructure, equipment and handsets, presenting opportunities to foreign companies like Ericsson, Motorola and Nokia as well as domestic players such as ZTE and Huawei Technologies.


Source: 3G licenses to follow telecom restructure (China Daily)
See also: Rewired: The long-awaited reorganisation of China's vast telecoms industry begins (The Economist)
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China Business 0 Comment June 2, 2008, 4:59 pm

The Chinese Finance Association's Winter Party -- Please Attend!

The Lehman China Law Blog would like to encourage our readers and anyone interested in making money in China to attend The Chinese Finance Association's winter party. The party will be held in Washington D. C. on this upcoming Wednesday, December 12, and feature special guest speaker Jim Rogers, co-founder of the Quantum Fund and author of ¡°A Bull in China: Investing Profitably in the World's Greatest Market.¡±

The Chinese Finance Association is a non-profit organization aimed at facilitating the exchange of ideas, knowledge and information on education, and research and practice in finance and related areas between the US and China. Lehman, Lee & Xu has been a member of TCFA since its inception. We cannot overemphasize our support for this group¡¯s activities and would like everyone to know what an excellent networking organization it is; it has been invaluable in growing our finance, mergers & acquisition, and hedge fund practice.

Ming Jiang, TCFA President, also announced via email that

In addition to Mr. Rogers' talk, Ping Jiang, Managing Director of SAC, would like to share with TCFA members some of his 'global macro value' ideas and his thoughts on a new type of hedge fund. Ping's talk is scheduled 7:30pm-8:00pm. Mr. Rogers will join us after 8pm.

In addition to Mr. Rogers and Ping's talks, we have some speakers from TCFA annual conference present. Among them, Eugene Xu and David Yan, both are experts in subprime and ABS area; Feng Chang, MD from Morgan Stanley, an expert in quantitative equity.


To register for the event, please visit the TCFA website.

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China Business 0 Comment December 10, 2007, 11:09 am

China Railway Co Ltd to go public

November 9, 2007 - by Maggie Xu

State-owned China Railway Co Ltd, formerly known as China Railway Engineering Group Co, received approval on Nov 16th from China Securities Regulatory Commission (CSRC) to go public on the Shanghai bourse, and will probably do so within the month.

China Railway plans to sell no more than 4.675 billion A shares in Shanghai, according to a preliminary document posted on the CSRC website.


Funds raised from the IPO will be used in purchasing new equipment, building new production lines, and for real estate market and railway investment. Together with circulating capital as well as debts to banks, the required funds totals 12 billion yuan (US$1.61 billion), according to an IPO prospectus the company submitted to the securities watchdog.

China Railway Co Ltd is totally owned by China Railway Engineering Group Co Ltd, the largest comprehensive construction contractor in Asia and the third largest in the world.


Half year operating revenue of China Railway Engineering Group Co Ltd ending June 2007 was a reported 75.68 billion yuan, with net profit totaling 1.38 billion yuan.

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China Business 0 Comment November 9, 2007, 2:49 pm

Textile Quotas End

October 16, 2007 - by Maggie Xu

The European Union (EU) has agreed with China to end quota restrictions on Chinese textile imports with a joint surveillance system to monitor the trade flow in 2008.

The "double checking system" will track the issuing of licenses for export in China and the importation of goods into the EU, the European commission said in a statement.

It will operate for one year in 2008 following the end of quota restrictions on Chinese textiles and clothing, the statement said.

Following a so-called "textile war," the EU and China reached an agreement in June 2005 on resuming quotas on China's textile exports to the EU, which expires at the end of 2007.

Although imports of these goods will be closely monitored, their level of import will not be restricted by this arrangement, the EU's executive arm said.

According to the commission, the joint surveillance system will cover eight categories of textiles and clothing from China, namely T-shirts, pullovers, men's trousers, blouses, dresses, bras, bed linen and flax yarn.

The system will be formally adopted by the commission in the coming days. On the EU side, national licensing offices will be in charge of the monitoring.
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China Business 0 Comment October 16, 2007, 9:02 am

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