Abundant Grain

China is able to guarantee stable domestic food supply and keep prices level, as the country has abundant grain reserves, said the National Development and Reform Commission (NDRC).

In March, international rice prices rose to their highest level in 19 years, and wheat prices rocketed to a 28-year peak.

China's current ratio of grain reserves to consumption is higher than the 17 to 18 percent level, which is regarded as a safe minimum for global stocks, said the NDRC, the country's top economic planning agency. Premier Wen Jiabao said in April the country has abundant grain reserves standing at 150 million to 200 million tons.

Inflation Pressure

Inflation could dip to 7.5 percent in the second quarter from 8 percent in the first, but inflationary pressures will stay strong because of surging grain prices and robust investment, said a government think tank.

"Seasonal changes and government measures to boost agricultural supplies may cause consumer prices to slide in the second quarter," the State Information Center under NDRC said in a report.

The Chinese Government is trying to limit consumer inflation to under 4.8 percent in 2008, but the consumer price index gained 8.7 percent in February, the highest in 12 years.

Microsoft's China Ambition

Software giant Microsoft said it will invest $280 million to build a research and development center in Beijing and significantly expand its research team in the country.

The new R&D campus, set to accommodate 5,000 employees, will become Microsoft's largest research center outside the United States when it is completed in 2010, said Zhang Yaqin, the company's China Chairman.

He said the company will hire 1,000 new research employees in China in the next fiscal year, which starts in July.

Microsoft currently has 3,000 research staff in China, with 1,500 full-time employees and another 1,500 working on a project basis, Dow Jones has reported. The company has said it will double the number of its full-time research employees in China to 3,000 in the next three years.

Warned of Wane

Tighten your belts and brace for two years of tough times, large state-owned enterprises (SOEs) have been told by Li Rongrong, Minister of the State Owned Assets Supervision and Administration Commission, which supervises the country's 150 largest SOEs.

"Please keep a close watch on your purses and do not splurge," Li, was quoted as saying during a recent field inspection by Economic Observer newspaper.

Some SOEs have reported a slowdown in profit growth in the first quarter. Rising inflation and raw material costs have also added to the woes of some large SOEs.

Struggling Food Exporters

China's booming food export industry is facing a difficult year as the overall environment for Chinese food exports has tightened and stricter examinations are required from Western importers.

Many food export firms in the spring session of the Canton Fair in April, the largest trade fair in China, were daunted by the rising examination costs after the dumpling poisoning case in Japan early this year, although the case was believed by both sides to be an individual one of sabotage. As a result, food exports to Japan and the Republic of Korea decreased drastically in the first quarter.

Between January and February, China exported 471,000 tons of foodstuffs for $1.02 billion to Japan, a decrease of 17.1 percent and 10.4 percent respectively from the same period last year.