China now boasts a colossal 29 trillion yuan ($3.94 trillion) worth of state-owned assets, excluding financial enterprises, while net assets stand at around 12.2 trillion yuan ($1.66 trillion).

However, experts complained that state-owned assets have kept shrinking due to serious abuses, and some local governments sold their state-owned assets at surprisingly low prices for untold reasons.

The draft law will not govern all types of state-owned assets, just operational assets, in contrast to resource assets like land and forest, and assets owned by public institutions and government agencies not for business purposes.

"The role of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has been in the spotlight during the law-making process," said Li Shuguang, a senior law professor with the China University of Politics and Law.

SASAC represents the Chinese Government in 150 major state-owned enterprises and now plays the role of supervisor as well as investor.

Li believes that in the future, SASAC will only perform the functions of an investor, not a supervisor.

Up the Value Chain

China will ban another 589 items from the processing industry effective as of January 21, in order to nail down exports of low value-added products and prevent industrial pollution. Some steel, petrochemical, aluminum and mineral products are among the list.

The first list was issued in April when 1,138 items were banned from the processing industry.

Such processing firms previously imported raw materials and re-exported finished products duty-free.

The Ministry of Commerce said it expects the ban will spur processing enterprises to develop in sectors with high-end technologies and add more value to their finished products.

Middle Class Woes

They are rich in the eyes of most people, but deep down, they feel as poor as those who envy them.

China Youth Daily and Sina.com jointly conducted a survey among 7,313 people who were labeled middle class.

Only 12.7 percent of the respondents agreed they are living a middle-class lifestyle. Many of them said they were poor people living in the city. Though their income is above average, their lack of the necessities for city life such as cars and apartments leaves many wondering if they really belong to the middle class.

The middle class in China is defined by the survey as those whose annual income ranges from $7,500 to $25,000 and who are between the ages of 20 to 49.

However, the latest survey found that only 2.2 percent of respondents agreed with that definition.

HSBC, Fudan University and MasterCard Worldwide did a similar survey in December 2007 and concluded that the number of middle-class consumers in the country is expected to nearly triple to 100 million in the 10 years from 2006.

It is not difficult to explain why they are upset. Skyrocketing housing prices have driven the middle class crazy. The really rich people can afford a house no matter how costly it is, but the poor can only afford to rent rent-controlled apartments which are provided by the government only to the poor people. The middle class group is caught between the two. They will have to work for 20 years to buy an apartment in the city.

Man of Mystery

Mainland stock investors suffered an icy slap ahead of the winter season when major stock indexes tumbled in the biggest monthly drop in history starting in November 2007.

The mainland magazine Money Weekly said that a mysterious A28090 (later changed to T20666) account should be held responsible for deliberately crushing the stock market.

It claimed the conclusion was drawn from TopView data from the Shanghai Stock Exchange, which revealed that the A28090 account sold blue chips such as PetroChina and Shenhua Energy at unreasonably low prices when the stock market showed little signs of recovering.

The magazine said that the operation style of the account was very different from regular traders. When PetroChina's share price surged to 48 yuan on its first trading day on November 5, doubling its Hong Kong share price, the account did not sell a share. However, when PetroChina share dropped to 40 yuan, the account sold 1.479 billion yuan ($200 million) worth of shares and continued slashing PetroChina's share price when the stock market showed signs of rebounding on November 28. It sold 3.2 billion yuan ($438 million) worth PetroChina shares from November 28 to December 12 with average price of 31.37 yuan.

PetroChina has the biggest weight in directing the benchmark Shanghai Composite Index, and was driven down to its lowest point of 29.15 yuan on December 18, casting a big shadow over all investors.

The report said that the mysterious account could not be revealed by the Shanghai Stock Exchange and indicated that it would be hard to identify the owner. The magazine did quote a fund manager as saying the account might belong to China Life and private equity firms from Zhejiang Province.