Businesswoman Sentenced

(CFP)

Wu Ying, 31, former boss of Bense Group, a business conglomerate based in east China's Zhejiang Province, received the death sentence for cheating investors out of several hundred million yuan in January. The sentence upheld the results of a previous trial at the Jinhua Intermediate People's Court in December 2009.

From May 2005 to February 2007, Wu raised 770 million yuan ($122 million) by promising high returns to investors. She still had 380 million yuan ($60.3 million) unpaid debt with creditors when the case was uncovered. Wu amassed the fortune by fabricating facts, deliberately hiding the truth, and promising high returns as an incentive. Most companies she registered haven't actually been opened or are losing money all the time.

The death-sentence verdict has sparked a heated controversy in society, with netizens calling for a more lenient punishment. A report from Xinhua news agency said that the controversy stirred by Wu's death sentence showed the urgency of the reform in China's financial system.

CPI at Three-Month High

China's consumer price index (CPI) rose to a three-month high of 4.5 percent in January, said the National Bureau of Statistics (NBS) on February 9. This growth rate is 0.4 percentage points higher than that in December 2011.

Food prices jumped 10.5 percent year on year, driving the CPI up 3.29 percentage points.

The surge was driven by a pre-Spring Festival (January 23) consumer boom, said Peng Wensheng, chief economist with China International Capital Corp. The inflation pressure is expected to ease this year.

The NBS also released the producer price index, which grew 0.7 percent year on year in January, compared with 1.7 percent in December 2011.

Tax Tussle

China said it will not require domestic airlines to pay carbon emission taxes imposed by the European Union on flights to and from Europe.

The State Council said Chinese airlines need approval if they want to join the emission plan, which the Chinese Government has denounced as an unfair trade barrier.

From January 1, the EU began charging airlines using EU airports for carbon emissions based on its Emission Trading Scheme.

The money will not be collected until April 30 next year, however, and China has added its voice to a growing global protest ahead of the date.

SOEs Profitable

China's centrally administered state-owned enterprises (SOEs) reported net profits of 917.33 billion yuan ($141.3 billion) in 2011, up 6.4 percent year on year, said the State-owned Assets Supervision and Administration Commission (SASAC).

But the growth rate was 33.8 percentage points down from a year earlier, partly due to the difficult economic situations at home and abroad, said the SASAC. The Chinese economy grew 9.2 percent in 2011, down from 10.3 percent in the previous year.

Total revenues of the central SOEs rose 20.8 percent to 20.24 trillion yuan ($3.2 trillion) last year, 11.3 percentage points lower than the previous year.

Auto Sales Tumble

January sales of passenger vehicles in China registered their largest year-on-year decline in the past decade.

The drop was largely attributed to the two holidays in a single month—the New Year and the Spring Festival.

Combined sales of cars, sport-utility vehicles, multi-purpose vehicles and minivans nose-dived 16.5 percent from a year earlier to 1.17 million units in January, said the China Passenger Car Association (CPCA) on February 7.

It's also the first time in recent years that these vehicle types have seen negative monthly growth rates.

"It's in accordance with our previous expectations of 15-20 percent negative growth. The three-day New Year holiday and the week-long Spring Festival holiday (January 22-28) not only cut production days by almost 50 percent, but also led to a void in the vehicle showrooms," said Rao Da, Secretary-General of CPCA.

Top Chinese automaker SAIC Motor Corp. said its January sales dropped 8.48 percent from a year earlier to 380,305 units.

Power Shortages

The China Electricity Council (CEC) said the country faces tightened supplies of electric power this year, with a shortage estimated to reach 40 million kwh.

Both regional and seasonal power shortages will occur in 2012, the CEC warned.

The CEC expected the country's electric power consumption this year to reach 514 million kwh, up 9.5 percent year on year. The growth rate represents an 11.7-percent decrease from 2011, as China is expected to experience slower economic growth this year.

The CEC added that China needs to improve its coal production capacity and increase imports to support rising demand for power-generating coal.

Hiking Fuel Prices

China raised retail prices for gasoline and diesel by 300 yuan ($47.53) per ton on February 8.

The benchmark retail price of gasoline will be lifted by 0.22 yuan (3.5 cents) per liter and diesel by 0.26 yuan (4.1 cents) per liter, said the National Development and Reform Commission.

The latest price change, which was much anticipated by the market, comes amid rising pressures for the country's refineries as the increasing international crude oil futures prices keep driving up their operation costs.