real estate market in the first half of this year.

Statistics show that paid-in foreign investment in the property sector accounted for 24.1 percent of the country’s total paid-in foreign capital, 11 percentage points higher than the all of last year.

China’s vacant residential buildings held by key property developers totaled 22.42 million square meters of floor space last year, and more than 70 percent of these were units of more than 100 square meters each.

Analysts attributed the increase in vacant housing mainly to the short supply of affordable housing for lower income earners and the escalating housing prices to speculative purchases of medium and high-end homes.

Analysts believe that the growth of foreign investment in the property sector will propel the unbalanced development of the housing supply in China, as most, if not all, of the investments go to medium and high-end housing markets.

Lenovo’s New Ambition

The Chinese leading personal computer (PC) manufacturer Lenovo Group was in talks with the European PC maker Packard Bell BV to acquire the European company’s PC business.

Although Lenovo’s sales increased rapidly, its image as a cheap brand is believed to have stunted its development in the international market. At the end of 2004, Lenovo announced that it would acquire IBM’s PC business. Packard Bell is Lenovo’s second target in its aim to become an internationally recognized brand.

Lenovo successfully completed the IBM PC integration and finally made a profit after a one-year profit slump due to the high acquisition fees. Lenovo published the 2007-08 first financial quarter (April 1 to June 30) report on August 2, which says the first quarter turnover reached $3.9 billion, up 13 percent from the same period last year.

Lenovo, one of a handful of Chinese firms trying to forge a global brand by investing abroad, dropped to fourth place in the world PC business in the first quarter of this year, but reclaimed third place from rival Acer, according to data from research firms of Gartner and IDC.

McDonald’s Employees Served

Four months after being accused of violating the Labor Law of China, the global fast food giant McDonald’s will raise salaries of its Chinese employees for the first time in 17 years.

McDonald’s announced on August 6 that it will increase salaries in 815 of its outlets on the mainland as of September 1. This move will involve 95 percent of McDonald’s employees and their salary will be raised 12-56 percent above the minimum salary requirement of each of the cities.

In April, All-China Federation of Trade Unions accused McDonald’s and its rivals of violating Chinese Labor Law, because the temporary workers’ salary was much lower than the minimum salary requirement. The salary per hour in Guangzhou McDonald’s was only 4 yuan, just above one half of the minimum of 7.5 yuan.

Its rival KFC hasn’t yet followed suit but is believed to be ready to follow McDonald’s practices soon.

Food Focus

China will spend 8.8 billion yuan to improve food and drug supervision, the industry watchdog State Food and Drug Administration (SFDA) announced on August 8.

SFDA spokeswoman Yan Jangying said the money will mainly be spent on building or upgrading infrastructure set to be in place by 2010.

SFDA will hold press conferences every two weeks to brief the media on the food security situation. In a briefing on July 11, Yan admitted the country’s food and drug situation was unsatisfactory and vowed to improve it.

“They are authorized to close factories, arrange spot checks, and seize whatever material they deem fit when probing sub-standard goods.”

Yan listed several projects for which the government funds will be used, including the upgrading of the 16 centers to test imported drugs as well as the National Center for Medical Devices Testing and relocation of the National Institute for the Control of Pharmaceutical and Biological Products.

“The current infrastructure and technology of China’s food and drug supervision system lags behind what is needed, especially in the western regions,” Yan said.

China will comprehensively improve the infrastructure and technology for food and drug administration over the next three to five years, according to SFDA.