Chinese President Outlines China’s Goals at Key Party Congress

China will take further steps to improve the overall quality of its economy and its international competitiveness, President Hu Jintao said at the opening of the 17th Communist Party Conference in Beijing. Hu emphasized the importance of scientific development and independent innovation, as well as energy and environmental conservation as China's economic boom continues.

He also said China will undertake the “arduous task” of narrowing the growing urban-rural and interregional gaps in development. The position of agriculture as the foundation of the national economy will be strengthened, he said.

Efforts will also be made to rebalance growth. “The ratio of consumption to GDP will increase steadily, and consumption, investment and exports will be coordinated to boost economic growth,” Hu said.

He reiterated aims to further open and improve the structure of China's capital markets, improve the competitiveness of the banking, securities and insurance industries, strengthen financial supervision and control, as well deepen reform of the investment system.

Hu added that per capita GDP of the year 2000 will quadruple by 2020 through “optimizing the economic structure and improving economic returns while reducing consumption of resources”.

He also said foreign investment will be better utilized, while China will “make innovations” in overseas investment, with support to be given to domestic firms carrying out international R&D operations.

Government spending on healthcare will be increased, while other schemes, such as a national system to ensure the supply of basic pharmaceuticals, will be launched.

The five-yearly congress is the most important event in Chinese politics. It appoints the politburo and its nine-member standing committee, the top ruling body in China.

Spotlight on Product Safety

China’s government has acknowledged the food safety and product quality problems amid growing concerns from home and abroad about food and product safety, and has enhanced efforts in recent months to raise safety and quality standards. An official said that, as far as product quality and standards are concerned, there still exist problems in every part of the country and that the government has undertaken the “arduous and heavy” task of inspecting product quality and food safety.

China kicked off a four-month campaign in August to restore confidence in consumer products at home and abroad, following a spate of safety scandals involving goods ranging from toys and tyres to seafood and toothpaste.

The campaign aims to strengthen inspection and monitoring efforts, and tighten production licensing and labeling requirements in order to overhaul the quality and safety of Chinese products.

The government also issued the first white paper on food safety in August and set up a high-profile panel on product quality and safety issues headed by Vice Premier Wu Yi, followed by a number of efforts made by various government organs to crack down on food safety issues.

On August 31, the quality watchdog officially introduced the nation's landmark recall systems for unsafe food products and toys, charging producers with prior and major responsibilities for preventing and eliminating unsafe food and toys.

China to Raise Renewable Energy Use

In a national plan announced in September, China pledged to increase its use of renewable resources to 15% of total energy consumption. The plan, which calls for the further development and expanded use of hydropower, wind power, biomass and solar energy, aims for the equivalent of 600 million tons of coal from renewable resources by 2020. In 2005, renewable energy accounted for 7.5% of China's total energy consumption. The plan is estimated to cost US$267 billion.

China failed to reach its national energy efficiency target in 2006. Energy consumed for every RMB10,000 (US$1,320) of GDP was 1.206 metric tons of standard coal equivalent in 2006, 1.33% less than in 2005. The drop was the first in three years, but well short of the 4% target set by the government.

China's Private Businesses Boom with National Economic Growth

China saw booming private businesses in the first half of 2007 when the national economy expanded by 11.5%, according to the State Administration for Industry and Commerce (SAIC). The number of the country's private firms reached 5.2 million by the end of June, up 4.49%, or 220,000 more than that of half a year ago, the SAIC announced.

The number of employees in the private firms rose 5.18% to 69.3 million and their combined registered capital jumped 9.54% to 8.3 trillion yuan (US$1.1 trillion). Meanwhile, the number of self-employed household employers climbed by almost 1%, to 26.2 million and the self-employed workers saw their population rising 2.89%, or 1.5 million, to 53.1 million.

China's Mobile Phone Users top 515 million by August; Output Reaches 348 Million Handsets

China's mobile phone users exceeded 515 million by the end of August this year, with a monthly rise of 6.8 million on average, according to statistics from the Ministry of Information Industry (MII).

Chinese cell phone users had sent a total of 378.5 billion short text messages by the end of August, up 38.3% year-on-year.

According to the ministry, China produced 347.6 million mobile phones between January and August, up 28% over the same period last year. The huge increase came as the companies designed low-priced handsets to cash in on the rising demand of more rich rural residents, the MII said. It forecast the country's output would account for 40% of the more than 1 billion units of global handset shipments this year.

Meanwhile, the number of fixed-line subscribers remained almost the same as last month's 372 million and the number of newly-added fixed-line users averaged only 579,000 per month, barely one tenth of that of mobile users.

Blog Companies Agree to Real-name Registration

At least 10 major blog service providers have agreed to sign a pledge that asks them to register their users' real names and contact information, according to media reports. The new guidelines, issued by the Internet Society of China (ISC) on August 21, "encouraged" the service providers to obtain users' names, addresses, contact numbers and e-mail addresses. However, the society said the guidelines were not compulsory.

In May, the ISC announced it would shelve plans to make all bloggers register their real names, citing technical difficulties. It said that users were still encouraged to use real names and that service providers would be held accountable for their users' blog content.

Passenger Vehicle Sales Rise 23.84%

China's automobile manufacturers sold 4.58 million passenger vehicles in the first nine months of this year, up 23.84% over the same period of last year, according to the China Association of Automobile Manufacturers.

The total included 3.44 million cars, up 25.76%, 251,700 sports-utility vehicles, up 51.7%, and 165,300 multi-purpose vehicles, up 20.75%.

The top 10 sedan brands, with sales totaling 1.12 million units and a 33% market share, included Jetta (FAW-Volkswagen), Santana (Shanghai Volkswagen), Buick Excelle (Shanghai General Motors), Camry (Guangzhou Toyota), QQ (Anhui Chery), and Xiali (FAW Tianjin).

The three largest Sino-foreign carmakers continued to be the top three sellers. FAW Volkswagen was first with sales of 684,786 passenger vehicles, followed by Shanghai Volkswagen and Shanghai General Motors.

The indigenous carmaker Chery maintained its fourth place.

Inaugural MasterCard Worldwide Index of China’s Affluent Shows Travel Is Top Priority

MasterCard Worldwide launched in August the new MasterCard Worldwide Index of China’s Affluent, offering insights to the well-heeled in Beijing, Shanghai and Guangzhou. Structured as a twice-yearly index, it surveys and analyzes key features of the spending patterns, lifestyle features and attitudes of China’s affluent in the first half of the year, and identifies their preferences for top brands across ten product and service sectors in the second half of the year.

“The number of affluent consumers in China is growing fast and their market power is being felt far and wide. Domestically, new wealth in mainland China’s major cities is powering spending, lifestyle choices and mindset changes among affluent consumers, and this has transformed the Chinese market. The affluent of China are also avid overseas travelers, so their spending power will impact the travel and hospitality industries globally as well,” said Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard Worldwide.

According to the MasterCard Worldwide Index of China’s Affluent, 92.6% of affluent households spent up to US$10,000 on leisure and recreational activities in 2006. Domestic and overseas travel were cited as the key priorities for spending time and money, ahead of fitness/going to the gym, visiting theme or amusement parks, sports and socializing. In 2006, 43.3% of the affluent traveled at least thrice within mainland China and 30% made at least three overseas trips.

Hong Kong topped the list of overseas travel destinations, with visits by 85.6% of affluent Chinese. Other top destinations include Macau (51.7%), Thailand (34.8%), Singapore (30.5%) and Japan (18.7%). Destinations further afield like France, Germany and Italy had less than 10% of the affluent travelers visiting them in 2006. “They are, however, poised to grow in importance as these are identified as most favored leisure destinations of the future, along with the United States and Australia,” added Dr. Hedrick-Wong.

The inaugural survey, conducted via face-to-face interviews, involved 900 participants – 300 in each of the three cities of Beijing, Shanghai and Guangzhou – whose household income fell between US$16,000 to US$50,000 annually. In terms of demographic profile, an overwhelming majority (67.1%) were below 40 years old, and well-educated: 66.9% had at least a Bachelor’s degree. Of this sample population, 25% were in the premium affluent category, defined as those who earned more than US$50,000 a year. (Source: MasterCard International)