Source: China Daily News Service 2008-01-16

DETROIT – Coupling great enthusiasm with greatly mangled translations, a trio of Chinese automakers displayed their latest designs in Monday news conferences at the

Detroit auto show. Geely, Changfeng and BYD (for Build Your Dreams) showed models ranging from compact sedans and SUVs to a plug-in hybrid.In addition, Chamco Auto, the American partner of Zhongxing Automobile, and Li Shi Guang Ming Automobile Design are making their first appearances in Detroit. Geely

China’s largest privately-owned automaker in terms of sales – showed six models, including the CK1 Freedom Cruiser, a budget compact sedan based on a Daewoo platform. Changfeng, familiar to showgoers from its Detroit debut last year, offered four models, including the Liebao CS6 SUV (The company’s endearingly wacky corporate statements and videos were a hit last year, with references to “soaring dragons and leaping leopards” that signify China’s booming auto industry and the revitalization of the nation itself.)BYD, a cellphone battery company that’s building an auto business, showed models including the F6, featuring a hybrid drivetrain.

United States. And while the cars they showed were visibly improved compared with Chinese models of just a few years ago, the public caution seemed understandable. Despite earlier assurances from other Chinese companies (or would-be importers like Malcolm Bricklin) that cars would be arriving at any moment, the models displayed in

Detroit still appeared too primitive and awkwardly styled to stand much of a chance with American consumers.Changfeng executives acknowledged that breaking into the United States market is a monumental task, but at least the company has a ready-made marketing jingle: because the carmaker’s name is pronounced “chang-fung” (rhymes with “hung”), a catchy chorus of “Everybody Changfeng Tonight,” seems a surefire way to get Americans – and the company – humming along.

Source: Xin Hua: 01/15/2008

Hong Kong has been ranked as the world’s freest economy for the 14th consecutive year by the Heritage Foundation in the foundation’s 2008 Index of Economic Freedom study released on Tuesday, a press release from the Hong Kong Special Administrative Region (HKSAR) government said.

According to the study report, Hong Kong scores exceptionally well in almost all areas of economic freedom.  Among the 10 individual areas assessed, Hong Kong ranks first in trade freedom, investment freedom, financial freedom and property rights.

Hong Kong also ranks in the top 10 in another four areas – fiscal freedom, government size, monetary freedom and labor freedom.  The report noted that Hong Kong’s income and corporate tax rates were very competitive, and overall taxation was relatively small as a percentage of gross domestic product (GDP). It also said that Hong Kong’s business regulation was simple, the labor market was highly flexible, and investment in Hong Kong was strongly encouraged with virtually no restrictions on foreign capital.
 

The foundation also complimented Hong Kong as one of the world’s leading financial centers, with its regulation of banking and financial services both non-intrusive and transparent. The study noted that property rights were protected by an independent and virtually corruption-free judiciary.  Compared to Singapore, Hong Kong fares better in regard to trade freedom, fiscal freedom, investment freedom and financial freedom, while

Singapore fares better in business freedom, government size, monetary freedom, freedom from corruption and labor freedom. Both Hong Kong and Singapore are ranked first in property rights.  ”We are determined to uphold Hong Kong’s position as the freest economy in the world,” Hong Kong Financial Secretary John C Tsang said while welcoming the study report. “We see the role of the HKSAR government as that of a facilitator. We provide a business-friendly environment where all firms can compete on a level-playing field and establish an appropriate regulatory regime to ensure the integrity and smooth functioning of a free market,” Tsang said.

The study measured the degree of economic freedom of 157 economies worldwide by assessing 10 factors: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, labor freedom. Hong Kong retained its position as the freest economy in the world, followed by Singapore and Ireland.

Source: Xin Hua:  01/11/2008

A report by the Chinese Academy of Sciences (CAS) predicted that housing prices in

China would keep on rising this year and the increase rate would roughly equal that of 2007.

The sale of residential buildings this year would hit 697.99 million square meters, up 2.24 percent year-on-year, according to the report on the prospects of the Chinese economy in 2008 released on Friday by the CAS forecasting center.

The real estate market would maintain a “good momentum,” and investment in the property sector would reach 2,54 trillion yuan (about 347.5 billion yuan), the report said.

The total floor space of “completed” buildings would drop 8.2 percent to 1.9 billion square meters in 2008, leading to a further dwindling of the housing supply, said the report, noting that the imbalance between supply and demand would be aggravated.

From January to November of 2007, housing prices in 70 major Chinese cities jumped 7.3 percent year-on-year. Housing prices were up at a rate of 10.5 percent in November alone, a report by the Chinese Academy of Social Sciences (CASS) showed.

The November rate was the highest monthly gain since July 2005 when the monthly housing price survey was started.

Source: Xin Hua 01/01/2008

A succession of forecasts for

China’s economy in 2008 have been released by International financial institutions and major foreign and domestic banks in recent months.

The following is detailed figures of the predicted GDP growth, Consumer Price Index (CPI) and the appreciation of Renminbi this year.

Source: Xin Hua 12/30/2007

China’s State Council, or the cabinet, publicized over the weekend policies aimed at cushioning the impact of enforcing the unified corporate income tax law.

The new law, to take effect on Jan. 1, 2008, will replace two earlier regulations that date back more than a decade and unify income tax rates for domestic and foreign-funded companies at 25 percent.

The cabinet said that the new law would be phased in five years. Companies that currently face an income tax of 15 percent will pay 18 percent in 2008, 20 percent in 2009, 22 percent in 2010, 24 percent in 2011 and 25 percent from 2012.

Companies that are exempt from taxes or have concessional rates will retain their preferences until the original expiration date. Those that don’t show the level of profit can retain their benefits in 2008.

Companies can make a one-time choice of the tax system that will be most beneficial.

The cabinet said the transitional steps targeted companies registered with industry and commerce administrations before Mar. 16, 2007.

Companies in the western part of the country aren’t affected by the new law but will continue to enjoy preferential rates under regulations jointly issued by the Ministry of Finance, State Administration of Taxation and China Customs.

Also, the country would offer incentives for key high-tech companies registered in special economic zones, including Shenzhen, Zhuhai, Shantou, Xiamen and

Hainan, as well as in Shanghai Pudong New Area, on and after Jan. 1, 2008.

These companies must have proprietary technology and must comply with a range of requirements to be classified as high-tech enterprises.

For earnings collected within their registered area, such companies would be exempted from corporate income tax for the first two tax years and pay income tax of just 12.5 percent from the third to the fifth tax years. Gains from outside these areas must be calculated separately.

The transitional polices are effective on Jan. 1, 2008.

Chinese companies are subject to a statutory income tax rate of33 percent, while many foreign investors have been given tax waivers or reduced tax rates as an incentive to invest in China.

The new law will, for the first time since 1978, put domestic and foreign firms on an equal footing in income taxation in a government effort to promote fair competition.

China has been among the top destinations for foreign direct investment (FDI) since it opened up to the world. It was the largest recipient of FDI among all developing nations for 15 successive years. Yet it also attracted per capita foreign investment of 53 U.S. dollars, less than one third of the world average and one-twelfth that of developed nations, according to the Ministry of Commerce.

The government has become increasingly selective over what types of foreign investment should be preferred and it doesn’t believe the unified arrangements would have much impact on inward FDI.

Source: Xinhua 12/12/2007

Chinese quality watchdog official reassured Wednesday that Chinese-made toys are safe and guaranteed for quality.

“I’m confident that with all the measures we have taken, China-made toys are assured to be both quality and safe products,” Li Changjiang, director of the General Administration of Quality Supervision, Inspection and Quarantine, said at a news briefing on the sideline of the Third China-U.S. Strategic Economic Dialogue.

Li said that the administration has strengthened inspection over toy production, processing and export through certification, and set up files for material providers for the toy manufacturers.

He said the administration also decided to perform safety checks on toy designs provided by foreign buyers, in response to toy recalls caused by faulty designs.

Li said he had personally inspected a Chinese toy-maker based in the southern province of Guangdong, and found out “the recalls did not affect the company’s toy production, but instead, the orders increased 10 percent ahead of Christmas.”

“Nice and inexpensive Chinese toys will win the hearts of children around the world,” Li said.

China is the world’s biggest toy exporter. In 2006, it sold 22 billion sets of toys overseas, about 60 percent of the globe’s total.

Customs statistics show Guangdong, China’s main toy production base, saw a year-on-year 22.9 percent growth in toy exports in the first ten months.

In response to food and toy scares, the Chinese government held a four-month crackdown on product safety, particularly toys and food stuffs, and also initiated intensive training sessions for toy makers to improve their knowledge of international product standards and safety awareness.

Source: Xinhua 12/05/2007

People’s Daily, the mouthpiece of ruling Communist Party of China (CPC), is running an editorial on Thursday urging Chinese to make concerted efforts to put “quality” first while seeking economic development next year.

The article comes after an annual high-profile economic conference closed on Wednesday afternoon. The meeting decided to adopt a tight rather than prudent monetary policy while identifying the primary tasks facing the Chinese economy in 2008 and in preventing an across-the-board inflation and overheating.

“The central economic conference is of crucial importance in unifying thinking and uniting Chinese of all ethnic groups to continue emancipating their mind, sticking to reform and opening-up policies, advancing scientific development and in promoting social harmony,” it said.

Describing the year’s economic achievement as “heartening”, the article reiterated the special significance of economic work to 2008 as the country would usher in the 30th anniversary of its opening-up and economic reform and host the Beijing Olympics.

Next year would also be the first for China to implement the strategies set by the 17th CPC National Congress in October where new Communist leadership was selected, it noted.

The newspaper said Chinese economic development should be centered upon a shift in economic growth from speed to quality, optimization of a market economy system, strengthening of macro-economic control, deepening reforms and opening-up policies, advancing technical innovation, and in improving people’s livelihood and energy and environmental conservation.

To achieve the goals, the article maintained the country must strive to coordinate growth in consumption, investment and exports, balance the quantity and quality of economic expansion, secure a harmony among population, resources and environment, and to properly tackle the issues of reform, development and stability.

The newspaper reemphasized the strategies mapped out by the meeting. These included consolidating the fundamental role of agriculture for economic expansion to secure grain crop supply and in enriching rural China, making enterprises at the core of technical innovation to enhance national competence and to curb energy and resource consumption and putting people first.

“A lot of big and happy events are to happen next year. Maintaining good momentum in economic expansion while improving the public’s livelihood and securing social harmony is very crucial,” the article said.