POWERING THE OLYMPICS: A trunk-mounted power generator is delivered to Beijing Electric Power Corp. on June 30. The generators will be used during the Olympics to provide power during emergencies

China's rail carriers have raised freight transportation fees to cover the extra costs brought about by oil price hikes, according to a statement issued by the National Development and Reform Commission (NDRC) on July 2.

Each freight car will be charged 5.7 yuan ($0.81)-14.8 yuan ($2.10) per ton plus an extra charge ranging from 0.03 yuan to more than 0.07 yuan per ton per km, the NDRC said.

"The previous charges for rail freight were relatively too low, and the move is meant to alleviate some pressure from recent oil price hikes," the NDRC's statement said. But it did not give the margin for the price markup from the previous level.

The government had pledged to freeze fares for rail passengers, urban and rural public transportation and taxis to minimize costs for ordinary citizens. But it has permitted increases on the transport of goods.

Mining in China

ArcelorMittal, the world's largest metal and mining company, is investing in China to set up a new automotive-oriented steel joint venture in the central Hunan Province.

The new company was expected to produce 1.2 million tons of automobile steel sheet annually, ArcelorMittal's China office told Xinhua News Agency.

ArcelorMittal, the Hunan-based Valin Group and Valin Steel Tube and Wire Co. Ltd. recently signed a cooperation contract for investing 5 billion yuan ($725 million) to set up Valin ArcelorMittal Automotive Steel.

Lakshmi Mittal, Chairman and CEO of the Luxembourg-based steel titan, said the move was part of its strategy to better serve both global and Chinese automotive clients by offering high value-added products with the support of ArcelorMittal technology.

Experiencing High Speed

China's first intercity express railway started a one-month trial run on July 1 on the Beijing-Tianjin route, according to the Ministry of Railways.

The trial run, to be conducted without passengers, included spot repairs, train management system control, and cleaning and catering services.

The Beijing-Tianjin express railway is the country's first high-standard express railway, with a designed speed exceeding 300 km per hour. The 115-km journey would take only 27 minutes.

Construction of the passenger rail line was started in July 2005 and was finished at the end of 2007.

The railway will be put into service on August 1.

Paying for Prowess

COFCO Ltd., China's largest national agricultural trading and food processing company, will buy a 4.95-percent stake in Smithfield Foods Inc., the largest pork producer in the United States, mainly because it wishes to acquire the American company's technology and management skills.

A spokesman for COFCO told China Daily that his company has offered to buy up to 7 million Smithfield shares at a fixed price to be determined when Smithfield issues convertible senior notes at a later date.

The purchase of a minority stake in Smithfield is part of COFCO's investment strategy, the Chinese company's spokesman said.

"What we have proposed to buy is not only stock in the company, but also its advanced technology and management skills," he said.

Choosing Oil Alternatives

China will reduce value-added tax (VAT) on dimethyl ether (DME), a coal-based alternative to oil, to help boost the development of alternative energy amid soaring world energy prices.

The Ministry of Finance and State Administration of Taxation jointly announced on June 30 that the government would cut the VAT on DME by 4 percent to 13 percent on July 1.

The adjustment removes the gap between the VAT rate levied on DME and other fuels, including liquefied gas and natural gas, and will help the development of the DME industry.