MORE POWER: Workers test the No.30 turbine of the underground power unit of the Three Gorges Hydropower Station. The unit is expected to be put into operation before the summer flood season this year. The underground power unit has six 700-megawatt generating units (ZHENG JIAYU)
Numbers of the Week
China's mobile phone users increased 19.83 million in the first two months of 2011 to reach 878.83 million, said the Ministry of Industry and Information Technology.
11.29 billion yuan
February lottery sales of the country rose 30.2 percent year on year to 11.29 billion yuan ($1.72 billion), said the Ministry of Finance.
TO THE POINT: China widens the tax rebate program for Hainan Province to stimulate the island's tourism industry. The banking sector fares well with profits surging last year. By imposing a higher resource tax on rare earth exploration, China tries to streamline the fragmented industry. The shipping giant COSCO jumps back into the black thanks to buoyant market demands. The international consulting firm McKinsey & Co. expects China to replace Japan as the world's top luxury goods market by 2015.
By HU YUE
Tropical Hainan Province has been given the chance to shine as China expands its tax refund program in the southern island to cover domestic tourists.
The new policy, effective May 1 this year, sets the rebate cap on purchases of no more than 5,000 yuan ($762) per person per trip and applies to domestic and overseas tourists 18 years and older who will fly to other destinations in China from the island. It covers 18 categories including jewelry, artwork, wristwatches and cosmetics.
Each eligible tourist can claim rebates twice a year, while island residents can claim rebates once a year. The refunded taxes include customs duties, importation value added taxes and excise taxes.
The program is part of the country's vigorous efforts to turn Hainan, once an agricultural backwater, into an international tourist destination.
The tax incentive is expected to add to the island's attractiveness, said Wang Keqiang, Deputy Director of the Hainan Provincial Department of Commerce.
The island hosted nearly 26 million tourists in 2010, 97 percent from the mainland. "Domestic travelers have great purchasing power, and Hainan will likely benefit from this," he said. "But we still have a lot to do to improve our infrastructure and shopping services."
Xia Feng, a research fellow with the Haikou-based China Institute for Reform and Development, said Hainan must make further progress if it's going to compete with destinations like Hong Kong, and the two sides will strengthen cooperation to propel common prosperity.
China's banks raked in a combined after-tax net profit of 899.1 billion yuan ($137 billion) last year, soaring 34.5 percent from a year earlier, the fastest pace in three years, said the China Banking Regulatory Commission (CBRC).
The net interest margin contributed 66 percent to the profit while the rest came from investment gains and fees and commissions.
Asset quality continued to improve, as the ratio of non-performing loans stood at 2.4 percent at the end of 2010, compared with 3.29 percent in 2009.
The CBRC struck a note of caution, citing risks that may arise from financing vehicles of local governments and bubbling property markets.
Meanwhile, liquidity strains are hassling some banks as the central bank tightens its monetary stance to keep serious inflation at bay, said the CBRC.
In a recent report, the international credit rating agency Moody's Investors Service said the outlook for China's banking system is stable for the next 12 to 18 months, as the domestic economy remains strong and provides banks with ongoing opportunities to generate strong earnings.
The key issue facing the banking system is the extent to which credit expansion can slow to a sustainable level that checks inflationary pressures, while simultaneously accommodating the government's 7-percent real GDP growth target from 2011 to 2015, it said.
"We expect a rise in banks' non-performing loans, which typically follow in the wake of very strong loan growth," said Yvonne Zhang, a senior analyst of Moody's. "Robust earnings, significant loan loss reserves and additional capital raised from the capital markets will help the banks tackle challenges in asset quality and continue improving their balance sheets."