As part of this issue for China Connect, we would like to highlight some of the major happenings in China during the past couple of months: culturally; politically; and economically; arranged by topic. Hopefully, this summary can provide a sense of understanding and help you be 'in the loop' about what is going in this part of the world.
Cultural
Year of Italy
China is the land of opportunity, some say. Or, at least, some nations believe this. As the second country of the EU after France to have a special year in China, Italy has been rolling out a comprehensive campaign to ‘enhance relationships’ between the two countries since this past January.
On May 17, a two-month string of activities was launched in Beijing to highlight Italian culture, including dance performances and art exhibitions. This ‘Italian Spring’, as it is called, is designed to convey a well-rounded view of the best that Italy offers.
Many businesses are using this year as an opportunity to present their products and raise awareness in China, such as the Giorgio Armani exhibition at the Shanghai Art Museum during April.
Considering all that has been seen from France and Italy in the past two years, it is little wonder these countries remain top brands with the Chinese.
Super Girl
 The hit television show Super Girl is the quintessential cultural experience for many Chinese. Travelers to Asia have long known about the importance of karaoke, and China is no exception. Singing remains the most popular form of entertainment to the vast majority of the Chinese. For the third year running, with this year’s competition commencing in May, Super Girl remains the most eagerly anticipated and watched television program in China. The program provides a chance for all female singing fanatics to make their dreams come true. Girls from different provinces in China compete against each other to win votes from the public to become the next Super Girl.
Since it kicked off this year, Chinese people in all regions have been glued to their televisions; the talented ones slowly move up the ladder, while the losing, teary-eyed contestants exit the stage and the next round begins.
Some outside observers say it is a little ridiculous, while others feel it is a chance for the lowly to rise to fame. Some also say that it’s a demonstration of democracy, allowing all Chinese to vote for their favorite girl through SMS voting.
Whatever the critics say, it clearly works and is a brilliant marketing tool by Hunan TV, the media group running the contest. Last year’s winner, Li Yuchun, even made the cover of People magazine.
So, pull out the snacks, pour some drinks and settle in for a few more months of laughter, joy, and tears as Super Girl continues on its quest for the next star of 2006.
Contributor: Brad Burgess
bburgess@webershandwick.com
Economic/Finance
Below are some of the key financial activities in China of importance:
- Additional fund raising permitted in China’s stock market: Starting May 8, listed Chinese companies were permitted to raise funds on the stock exchanges. IPO’s are expected to come soon as well.
- Chinese bank IPO’s: The recent Chinese bank IPO’s have been attracting attention from global investors. Bank of China raised USD 11.2 billion in a Hong Kong IPO on June 1, which is the fourth largest IPO in the world to date and the largest since 2000. Industrial and Commercial Bank of China is planning to be listed in Hong Kong in September. The ICBC IPO is expected to be one of the world's biggest, raising up to USD 12 billion. China CITIC Bank and China Merchants Bank are planning an IPO in Hong Kong within this year. Bank of China and Industrial and Commercial Bank of China are also seeking IPO’s in China’s A-share market this year.
- China raises interest rates: China increased bank-lending rates for the first time since 2004. Starting April 28, the central bank raised rates to 5.85 percent from 5.58 percent, making it slightly more expensive for companies to borrow money. Some argue that Renminbi revaluation will continue.
- QDII announcement: April 13, the People’s Bank of China and State Administration of Foreign Exchanges put out a joint circular announcing an important set of foreign exchange market liberalization, including the first steps toward a "true" individual QDII-style regime: 1) Domestic banks can now take corporate and individual RMB assets and, subject to quotas, invest them in overseas fixed income products; 2) Domestic asset management companies can now take corporate and individual FX assets and, subject to quotas, invest them in overseas markets, including equity markets; 3) Insurance companies now have wider scope to invest in overseas fixed income markets.
- Measures to cool down the real estate market: In May, China issued national measures to cool down the real estate market, such as the move to boost the minimum down payments on housing of more than 970 square feet (considered ``luxury housing'') from 20 percent to 30 percent, imposing new taxes to prevent resale within five years, and increasing construction of low-cost housing, etc.
Adapted from financial news
Contributor: Jeff He
jhe@webershandwick.com
Public Policy
Campaign against commercial bribery
Commercial bribery is a key issue that the Chinese government is addressing in 2006 as part of its anti-corruption campaign. In the past few months a number of government bodies have started to take action to tackle commercial bribery in the industry sectors they are overseeing. Although commercial bribery extensively exists in many areas, it more frequently happens in the health care and finance sectors, and also in government procurement processes. The China Banking Regulatory Commission, the Ministry of Health, the State Food and Drug Administration, and the Ministry of Finance all voiced their determination and action plan to deal with commercial bribery.
State Council passes the draft Anti-monopoly Law
In early June, the State Council reviewed the draft anti-monopoly law again and gave principle approval to the draft. The draft law will subsequently be submitted to the Standing Committee of the National People’s Congress deliberation and is expected to be officially promulgated before the end of 2007. The anti-monopoly law, once enacted, aims to provide a free and fair competitive environment to all enterprises operating in China. China started its work on the anti-monopoly law in 1994, and the process has quickened since China’s entry into WTO in 2001. The first draft was completed in 2003, but has been revised a number of times to reconcile the interests of various parties.
Environmental protection increasingly important
Environmental protection is gaining increased attention from the Chinese government. The Ministry of Finance just announced that it would make policies to encourage environmental protection and more efficient use of natural recourses. This is one of the measures the government has taken to address environmental waste issues. The State Environment Protection Administration also requires that regulations on environmental protection be well observed, demanding that environmental protection be an indicator when assessing the performance of related government officials.
To establish implementation of ‘Measures to Control the Pollution of Electronic and Information Production’, which will take effect from March 1, 2007, the Ministry of Information Industry, together with another six ministries have started to jointly develop national and industrial standards.
Contributor: Jeffrey Guo
jguo@webershandwick.com |
