The central SOEs hold the bulk of the country’s key assets and account for more than 80 percent of the total profits of listed companies. That explains why the Shanghai A-share market gained 2 percent on April 19 in reaction to the good news.

To better position themselves for the recovery, it is imperative now for the central SOEs to ensure fluid cash flows and press ahead with innovations based on market realities, Li said. Moreover, they are supposed to move forward in corporate governance, organizational restructuring, updating information systems and improving the quality of employees, he added.

China Mobile Loses Steam

China Mobile Communications Corp. is feeling the pain of economic downturns, though its dominance in the domestic market still seems unshakable in the near future.

The mobile giant recently announced that it signed up 19.91 million new customers from January to March, or 1.23 million less than the same period last year.

Its Hong Kong-listed unit, China Mobile Ltd., also slackened off with profit growth slowing to 5.2 percent for a total of 25.2 billion yuan ($3.6 billion) in the first quarter year on year, as compared with the double-digit growth rates in the past few years. The national economic slowdown and intensifying competition have dented the company’s growth, China Mobile said in a statement.

Apart from China United Telecommunications Corp. (China Unicom), China Mobile now faces a new competitor in mobile services—China Telecommunications Corp.—which purchased the CDMA network from China Unicom as part of a government-mandated industry restructuring last year.

Yet, they remain far from posing a real threat to China Mobile whose total customer base now amounts to 477 million, more than double the combined number of customers of the other two operators.

New Auto Financing Firm

Chery Huishang Auto Finance Co. Ltd., China’s first domestic automobile financing company, opened for business in Shanghai on April 21.

As a joint venture between Anhui Province-based automaker Chery Automobile Co. Ltd. and Huishang Bank, the new company has a registered capital of 500 million yuan ($73.2 million), 80 percent of which comes from Chery. It will provide financing for wholesale and retail auto purchases, auto maintenance services and will also offer auto financial leasing services. Huishang Bank is a local commercial bank based in Anhui Province.

The company is widely considered to be a curtain-raiser for more domestic firms to make a push into auto financing. Analysts believe the auto finance sector has great potential to prop up domestic auto markets although it is still relatively undeveloped on the mainland.

China’s first auto financing company was set up in August 2004 by General Motors Acceptance Corp. and Shanghai Automotive Group Finance Corp. The government did not allow auto financing companies without a foreign stakeholder until January 2008.

Safety First

International SOS Assistance Inc., a global provider of medical rescue and security services headquartered in the United States, signed a cooperation agreement with China’s PICC Property and Casualty Co. (PICC P&C) in April. The People’s Insurance Co. (Group) of China (PICC) is the country’s top non-life insurer.

According to the deal, PICC P&C will introduce an overseas travel insurance product for Chinese who make business trips, study and work outside the country. The product will offer a variety of services provided by SOS International, including medical consultations, medical rescues, online translations, and assistance with missing luggage and lost passports.

The agreement also marks a step forward in the medical giant’s expansion into China. It now operates two 24-hour alarm centers in Beijing and Hong Kong and four medical clinics in Beijing, Nanjing, Tianjin and Shenzhen and provides medical support to clients in more than 45 locations across China.