China's anti-money laundering law took effect on January 1 this year. The central bank acknowledged that the country's anti-money laundering system has improved but still faces many challenges.

Foreign Investment Redirected

Foreign investors will be able to invest in futures companies starting from December 1. But that news comes with strings attached.

In early November, the National Development and Reform Commission and the Ministry of Commerce jointly issued an amendment of the Catalogue for the Encouragement of Foreign Investment Industries, allowing foreign investors to invest in futures companies, which was forbidden in 2004's catalogue.

The amendment stated that futures companies invested in by foreigners must be controlled by Chinese counterparts.

"A few years ago, the domestic futures market was small in scale with limited trading products," said Guo Tianyong, banking professor with Central University of Finance and Economics, "It was totally understandable that the government forbade foreign investment from entering the futures sector."

But with the expansion of the domestic futures market, the introduction of foreign investment will be conducive to improving the operational ability of domestic futures companies and boosting the healthy development of the futures industry.

In the meantime, the catalogue discourages foreign investment in residential building and foreign participation in real estate agencies. Those wanting to engage in such operations will face stricter controls.

Quarterly Reports of Listed Companies in the A-Share Market

Banking Industry

Industrial and Commercial Bank of China (SH, 601398): The country's largest lender reported a net profit of 63.3 billion yuan in the first three quarters, an increase of 66.72 percent year on year. It was the biggest profit increase ever and the profit earned in the first nine months was 14.6 billion yuan more than the total profit earned in 2006.

The report showed steady loan business, an effective readjustment of business structure, an efficient control of debit cost and strong growth of intermediary services were major reasons for the outstanding performance. The ratio of non-performing loans was 3.06 percent.

China Construction Bank (SH, 601939): Asia's most profitable bank reported a net profit of 57.1 billion yuan in the first three quarters. The latest report is the first quarterly report of the newly A-share market listed bank.

Numbers of the Week 659.1 billion cubic meters The actual water supply capacity per year reached 659.1 billion cubic meters, according to Chen Lei, Minister of Water Resources. Annual demand increases are less than 1 percent. The on-going construction of south-to-north water transfers will help relieve water shortage in China's northern areas. 13 in 13 In the next 13 years, China will build 13 new nuclear power stations which will produce a total of 23 million kilowatts of power. The locations will be picked from coastal provinces in Guangdong, Zhejiang, Shandong, Jiangsu, Liaoning and Fujian.

The report showed its capital adequacy ratio was 12.53 percent, and the ratio of non-performing loans dropped to 2.83 percent, tantamount to 92.44 billion yuan.

Bank of China (SH, 601988): The country's third largest bank by assets reported a net profit of 45.74 billion yuan in the first nine months, growing 41.64 percent from the same period last year. The earnings per share of the bank were 0.18 yuan.

Compared to mid-2007, the subprime mortgage investment balance of the bank was reduced by 17.5 percent. Bank of China was hit hardest by the U.S. subprime mortgage crisis of all Chinese banks.

Bank of Communications (SH, 601328): As the fourth largest commercial bank in China, Bank of Communications earned 14.7 billion yuan in the first three quarters, showing a robust growth of 56.28 percent.

Officials of the bank said it has the greatest growth potential of all big banks. HSBC held Bank of Communications' shares in aggregate of 19.15 percent by the end of October 26.