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This Week
Print Edition> This Week
UPDATED: October 26, 2007 NO.44 NOV.1, 2007
ECONOMY
 
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Boost Rural Financial Sector

China may allow small rural lenders, who are currently only allowed to issue loans, to restructure into village banks or lending companies, as the country moves further to improve financial services in rural areas.

Jiang Dingzhi, Vice Chairman of the China Banking Regulatory Commission, said qualified small lenders in rural areas could restructure according to the requirements of the commission.

Jiang also said the nationwide expansion of rural banks with both foreign and domestic capital should be carried out "steadily," instructing local watchdogs to allow one or two financial institutions to begin trial operation in each province as an initial step.

Capital Goods Remain Strong

China's capital goods prices will maintain a high level in the fourth quarter this year, driving the annual rise in prices of capital goods in distribution to four percent, according to the National Development and Reform Commission.

The monthly rise in capital goods prices dipped to 0.7 percent in June but it rebounded over the following three months to settle at 4 percent in September.

Strong demand on the international market was driving up the steel prices and the domestic demand for steel and cement was solidly backed up by increasing fixed assets investment, the report says. Analysts said rising producer prices had driven up consumer prices.

Mercedes Plant in Fujian

German automaker Daimler AG launched a joint venture with Fujian Motors Group and Taiwan-based China Motors Corp in southeast China's Fujian Province. The joint venture, which will hire up to 2,800 local employees after production starts in mid-2009, will manufacture 40,000 Mercedes-Benz multi-purpose vehicles (MPVs) annually.

Over the next 10 years, the premium MPV/transporter market in China is expected to grow to approximately 500,000 units annually, from the current level of 200,000, Daimler has estimated.

Ulrich Walker, Chairman and CEO of Daimler Northeast Asia, said this $295 million production facility would be Daimler's south China pillar and would be flexible enough to adjust volume and model mix based on demand.

VC Investment Hits New High

China's private equity (PE) investment doubled in September from the previous month to $990 million while venture capital (VC) investment saw a monthly jump of 54.7 percent to $365 million, a new high in 2007.

Pushed by investment in education, beverage and food processing industries, the average amount of each VC investment rose by 12 percent from the $11.2 million of September.

Two thirds of VC investment deals in September were in the non-TMT (technology, media and telecommunication) sectors.

Seven companies in the education and training sector received a total of $123.7 million of VC investment as vocation and certificate training become the most popular sectors for investors.

VC investment amounted to more than $2 billion in the first nine months of 2007 while 15 China-oriented private equity funds raised a total of $9.67 billion in the same period.

Submarine Cable for Olympic TV Audience

Construction has begun on the main body of a new submarine fiber cable system, called the Trans-Pacific Express, at sea in Qingdao, a coastal city in east China.

The new cable, the first to directly link the United States and China by skipping over Japan, is expected to be put into use in July next year before the opening of the Beijing Olympic Games on August 8. The completion of the Trans-Pacific Express will help meet the demand of the 5 billon global audience that will watch the Beijing Olympics on TV.

It will become the submarine fiber cable with the largest capacity and the longest span in China, linking the Chinese mainland with Taiwan, the Republic of Korea and the United States.



 
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