Chinese insurance companies are also major players in the fledgling stock market. Policy adjustment has made insurance capital an increasingly important player in the capital market. In July, the China Insurance Regulatory Commission (CIRC) allowed insurance companies to invest up to 10 percent of their total assets in stock market, compared with the original 5 percent.

CIRC figures show that in the first half of this year, insurance companies have made profits totaling 137.4 billion yuan, up 260 percent year on year, of which funds, stocks and equity investment accounted for 72.9 percent of the total profit.

China's policies have offered increasingly more opportunities for overseas institutional investors. In the second half of this year, China will resume the ratification of stock brokerages, and will expand the investment quota of QFIIs to $30 billion.

Gloomy Bird

Ningbo Bird Co., the previous leading producer of Chinese domestic cell phones, suffered losses in the first half of 2007 totaling 237 million yuan. It expected further losses in the third quarter.

Ningbo Bird attributed the failures to the increased pace of product upgrades and replacements. It also stated that counterfeiting and illegally purchased cell phones have greatly dampened its profits.

Statistics show that in the second quarter, foreign branded cell phones took up two thirds of the market, posing great challenges to domestic cell phone producers.

Xiamen Amoi Mobile, another domestic industry leader, has also been hit hard with losses reaching 350 million yuan.

Experts believe it will take a long time for domestic cell phone producers to make profits due to tough market competition and product upgrade pace.

Improving Financial Services

On August 29, the People's Bank of China published a report about progress in improving financial services. The key points included:

- Financial statistics are playing a role in serving economic development. The central bank planned and created a nationwide centralized financial statistics information system to improve the statistics process and achieve data integration and sharing. The central bank discloses financial institutions' sources and uses of local and foreign currency credit funds, money supply statements and other financial information through Xinhua News Agency, Financial News, China Finance and the central bank website.

- China National Advanced Payment System has been successfully established. Bankcards can be used nationwide in different banks' ATM. Renminbi cards are accepted and issued overseas in larger volume. As of end 2006, 1.2 billion bankcards had been issued with a total transaction volume of 64 trillion yuan. Altogether 26 countries and regions had accepted Union-pay renminbi cards. Notes are used and circulated in a wider range. Checks can be used nationwide through a check image exchange system.

- The credit information system is gradually being improved. The central bank established a nationwide centralized database comprised of credit information of individuals and enterprises. As of the end of June, a credit information database had created credit references for 12.2 million enterprises, while a credit information database of individuals had created credit references for 570 million people, the largest credit information database for individuals in the world so far.

- Anti-money laundering has made great progress. On June 28 this year, the Financial Action Task Force plenary meeting in Paris reached a consensus to accept China as a formal member. The monitoring and analysis of suspicious funds were further expanded and the central bank anti-money laundering monitoring and analysis system network has covered 297 institutions. From 2003 to 2006, the central bank has transferred 5,247 anti-money laundering reports to the Ministry of Public Security and discovered 60.775 billion yuan of illegal funds.

Numbers of the Week $750 billion By the end of 2006, China had attracted over $750 billion in foreign direct investment since the country first opened its market to the outside world in 1978. In 2006, exports by foreign-invested companies accounted for 58 percent of all Chinese exports and paid 21 percent of all taxes. 500,000 autos China is expected to export 500,000 autos in 2007 with a total value of $5.6 billion, according to China Chamber of Commerce for Import and Export of Machinery and Electronic Products.