First in, First out

But UBS shouldn't follow the lead of Changjiang BNP Paribas Peregrine.

Having once boasted of being the first joint venture securities company in China, that company is now getting out of the game.

According to their joint statement, due to "different opinions on future development," France's largest bank, BNP Paribas, and China's Changjiang Securities said goodbye to each other after three years of fumbling. BNP Paribas plans to sell its total 33 percent stake to Changjiang Securities.

Jiang Jianrong, a researcher with Shenyin & Wanguo Securities, pointed out that the breakup reflected the current predicament of joint venture securities companies. Changjiang Securities was eager to make a huge profit as soon as the joint venture started, while BNP Paribas was more focused on long-term development

"The French side was actually seeking time to become wholly foreign-owned," Jiang said. "The joint venture was just a springboard, and they didn't care that much."

However, the Chinese side expected to learn from the advanced management and operational expertise of the foreign company and had high hopes of making a stronger company. Oh well.

The breakup will certainly cast a shadow over foreign companies entering the Chinese securities market.

Note to UBS:

If you can get a good prenup with Beijing Securities, do it.

Insuring the Mainland

As The Wall Street Journal reported, Marsh & McLennan Companies, the first wholly foreign-owned insurance company, was approved by the Chinese Government to perform certain businesses.

The approval reflects China's commitment to opening up its insurance industry, which was on its to-do list after the five-year WTO transitional period ended in December 2006.

From now on, Marsh & McLennan will be able to charge commission fees for its insurance services provided for Chinese and foreign enterprises in China. Currently, Marsh & McLennan is not allowed to serve small enterprises.

Although there are still some restrictions, Greater China operations CEO Paul Wilkins is optimistic, saying that his company will be able to do business just as if it were operating in the United States and Europe.

More SkyMiles to Shanghai?

Atlanta-based Delta Air Lines Inc. applied to the U.S. Department of Transportation on January 19 for a direct flight beginning March 2008 to connect Atlanta, the world's biggest airport hub, and Shanghai, China's financial and economic center. If the application is approved, the flight will become the first to fly between Shanghai and Atlanta. Currently, there is no direct flight between southeast America and Shanghai.

But by then, Delta could have a new name, or at least a new owner. In its home country, Delta Air Lines is faced with a possible acquisition by U.S. Airways Group, according to The Wall Street Journal.

Atlanta Mayor Shirley Franklin spoke highly of this initiative, saying that China was one of the most important export destinations for southeast America and the State of Georgia.

Tax Revenue Surges

Xie Xuren, Commissioner of the State Administration of Taxation, announced in a press conference that the total tax revenue remitted to the treasury last year amounted to 3.7636 trillion yuan, up 21.9 percent or 677 billion yuan more than that of the previous year.

The commissioner stated the fast growth in tax revenue in 2006 is a reflection of the steady and speedy growth of the national economy and the large increase in enterprise profits. This is in spite of a decrease in the corporate income tax rate and an increase of deductibles in individual income taxes.