BONANZA: The 16th China Lanzhou Investment and Trade Fair was held in Lanzhou, Gansu Province on July 5-9, 2010. The value of contracts inked at the fair totaled 100 billion yuan ($14.77 billion) (WANG JUN)

Resources Tax

China, the world's second largest energy consumer, plans to impose a new tax on the extraction of coal, oil and gas in the country's western region. The move is expected to boost tax revenues for the region's local economy.

The country will change the resources tax in the region to a price-based rather than volume-based levy, the government said on July 6.

China has imposed a 5-percent price-based resources tax on crude oil and natural gas in Xinjiang Uygur Autonomous Region since June 1.

Green Supports

Shenzhen City, Guangdong Province, began offering subsidies for new energy vehicles on July 6. It's part of a national program to offer subsidies for purchases of plug-in hybrids and electric vehicles.

The Central Government on June 1 decided to offer subsidies of up to 50,000 yuan ($7,353) and 60,000 yuan ($8,824) to each plug-in hybrid car and each pure electric car, respectively, in five pilot cities—Shenzhen, Shanghai, Changchun of Jilin Province, Hangzhou of Zhejiang Province and Hefei of Anhui Province.

Shenzhen will offer additional subsidies of up to 30,000 yuan ($4,412) for each plug-in hybrid car sold, and 60,000 yuan ($8,824) for each pure electric car sold, while private car users are eligible for a subsidy of 9,000 yuan ($1,318) for each energy-efficient car they buy.

Shenzhen-based electric carmaker BYD Co. is a key beneficiary of the program. BYD vehicles including its hybrid F3DM and the electric e6, can enjoy a combined deduction of 80,000 yuan ($11,765) or 120,000 yuan ($17,647).

Sovereign Fund Spin-off

Chinese authorities are considering a plan to strip China Investment Corp. (CIC) of all its domestic banking stakes, which will hopefully help diversify its investment portfolio, said a China Daily report.

Banking shares held by CIC reportedly totaled $70 billion when the fund was established in 2007, including large stakes in Bank of China and the Industrial and Commercial Bank of China. Central Huijin, a wholly owned subsidiary of CIC, currently holds the banking stakes.

The move is expected to free CIC from certain restrictions when it invests overseas and help diversify investment risks. CIC invests mostly in banking and non-financial business such as energy, as it is now considered a bank holding company instead of a financial holding company.

ICBC's Canadian Branch

The Industrial and Commercial Bank of China (ICBC) is to start banking operations in Canada, the bank said on July 6.

The Canadian operations will provide a business platform for the bank to expand into the local market and, along with its New York branch, further strengthen the bank's North American presence.

The bank completed the acquisition of 70 percent of the Bank of East Asia (BEA Canada) in January this year. All former branches of the Canadian bank, four in Toronto and two in Vancouver, will be converted to offices of the ICBC (Canada). ICBC's Canadian operations will have a client base of around 10,000 retail and corporate customers.

ICBC, the world's largest commercial bank in terms of market capitalization, has now set up 175 foreign branches in 22 countries and regions.